Time value Personal Finance Problem As part of your financial planning, you wish to purchase a new car exactly 6 years from today.
The car you wish to purchase costs $17,000 today, and your research indicates that its price will increase by 3% to 6% per year over the next 6 years. Estimate the price of the car at the end of 6 years if inflation is 3% per year and 6% per year.
How much more expensive will the car be if the rate of inflation is 6% rather than 3%?
Estimate the price of the car if inflation is 3% for the next 2 years and 6% for 4 years after that.