Katrina is thinking about buying an automobile. She figures her monthly payments will be € 9 0 for insurance, €3 0 for gas, and €2 0 for general maintenance.
The car she would like to buy may last for 4, 5, or 6 years before a major repair, with probabilities of 0.4, 0.4, and 0.2, respectively.
Calculate the present worth of the monthly expenses over the expected life of the car (before a major repair). Katrina's MARR is 10%, compounded monthly.