3. Sonia Sopwith has set her heart on buying a car. She plans to do
this 5 years from now at which time she expects the car to cost $10,000. The rate of interest at the bank she uses is expected to remain constant at 8 percent per year throughout the next five years. Two years from now, her mother has promised to give $2,500 to her which she can put in the bank to help pay for the car. Assuming she saves the same amount out of her salary each year, how much must she save at the end of years 1-5 if she wishes to have enough money to buy the car five years from now?
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