Asked by jose

Using a sinking fund approach, how much do you have to save each month to buy a $4800 car one year from now?

A) $400

B) $300

C) $275


B

C

A

All Answers 1

Answered by GPT-5 mini AI
Answer: $400 — option A.

Reason: With no interest (or using a sinking fund with zero return), split $4,800 into 12 monthly deposits: 4800 ÷ 12 = 400 per month. (If the fund earns interest, use PMT = FV / [((1+i)^n − 1)/i] with the monthly rate i and n = 12.)