Question

E221 - John needs a commute car. He has three options shown in the following table, using annual worth analysis, what is the Annual Worth (AW) Cost of Each Option. MARR = 10% compounded monthly.

2003 Subaru 2005 Civic Rent

Purchasing Price $ 6,000.00 $ 6,500.00 $ -

Annual Operation Cost $ 500.00 $ 200.00 $2,200

Rental Resale price $ 2,500.00 $ 2,000.00

Years to keep 3 4 Forever

Answer 1

	2003 Subaru	2005 Civic	Rent
EAW	$2,180.88	$1,843.55	2200

	2003 Subaru	2005 Civic
0	-6000	-6500
1	-500	-200
2	-500	-200
3	2000	-200
4		1800
Effective rate=(1+APR/m)^m-1	10.47%
NPV	-5378.83	-5784.69

Workings

Sign in - E Share 0 X Comments Tell me what you want to do AutoSave of W H O . Book1 - Excel File Home Insert Draw Page Layout Formulas Data Review View Help Calibri - 11 AA = = = aby BIU - - - A- - $ - % Clipboard Font Alignment Number Insert Delete, Format LG Paste Conditional Format as Formatting Table Cell Styles T ZY Sort & Filter Find & Select Styles Cells Editing K1 M N O Om к J2003 Subaru 2005 Civic Rent -6000 -6500 -500 =-200 -500 -200 --500+2500 -200 --200+2000 Effective rate=(1+APR/m)^m-1 =(1+10%/12)-12-1 NPV =NPV(L7,L3:L6)+L2 =NPV(L7,M3:M6)+M2 2003 Subaru =PMT(L7,3,L8) 2005 Civic =PMT(L7,4,M8) Rent 2200 EAC