Question

18) Ana h r w e bu his ther the s e he pays 400 OOO and takes a 20 year on What interest compounded monthly (240 monthly payments) A) 230 B) 247 C) 2864 D) 3100 19) We are looking at buying a new machine that will os 100.000. It will have a salvage value in 5 years of $75,000. At an interest rate of 5% what will this machine costus on an annual basis A) 48.718 B) 54,765 C) 62,291 D) 69,897

Answer 1

18)

Effective monthly interest rate = 6%/12 = 0.5%

N = 240

I/Y = 0.5

PV = -400,000

FV = 0

CPT PMT

PMT = 2,864 (Option C)

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