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. A company wishes to save up to purchase state-or-the-art inspection system currently worth $510,000, How much would the company have to deposit monthly into an account that pays 7.25% per year...


. A company wishes to save up to purchase state-or-the-art inspection system currently worth $510,000, How much would the com
. A company wishes to save up to purchase state-or-the-art inspection system currently worth $510,000, How much would the company have to deposit monthly into an account that pays 7.25% per year compounded quarterly in order to have enough money to purchase the equipment in 4 years? The inflation rate is projected to be 2.8% per year.
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ReportAnswer #1

cost of equipment after 4 years with 2.8% inflation is:

C = 510,000*1.028^4 = 569,560

Monthly interest rate:

r = 7.25/12 = 0.6042\%

For this the final amount for an EMI is given by the formula:

A = EMI*(\frac{(1+r)^{nY} - 1}{r})

A = 569,560; r= 0.006042;Y = 4;n = 4(Quarterly)

569,560 = EMI*(\frac{(1+0.006042)^{4*4} - 1}{0.006042})

This gives monthly payment as:

EMI = 34,012\

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. A company wishes to save up to purchase state-or-the-art inspection system currently worth $510,000, How much would the company have to deposit monthly into an account that pays 7.25% per year...
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