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Question
Amie is planning to travel to New York in a campervan for one year. Her first option is to rent a campervan for $5000. Alternatively, she can buy a campervan for $60,000. The campervan has a depreciation rate of 10% per year. Each year, the value of campervans is also expected to increase by 5% due to the nature of the market. The interest rate on the market is 2%. Which option is better for Amie? Would she be better off renting the campervan for one year? Or would she save more by buying the campervan and then selling it at the end of her travels (i.e. after one year when she leaves New York?
