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- (30 points) The following cash flow diagram indicates the monthly payments you will have in the future. Assume that the interest rate is 12% per year. $3.200 $2.800 $2,400 $2,000 16 17 18 19 20 21 a) (15 points) What annual amount should you save for the first 12 months to complete the following payments starting from 18th month, if you expect your parents to also deposit into your account $1000 at the beginning of month 2? b) (15 points) Explain how your answers to (a) will change if the interest rate increases. Write your comments in your words.If we are charged $50 on a $500 loan that is due in 1 month, what is the effective annual rate? (ieff) A 100% B 120% C 180% D 200% E 213% F 223% G 243% H 263%A company purchase a piece of manufacturing equipment for an additional income. The expected income is $4.500 per semester. Its useful Me is 9 years Expenses are estimated to be $500 semiannually. If the purchase price is $44,000 and there is a salvage value of $4,500, what is the prospective rate of return (IRR) of this investment? The MARR is 10% compounded semiannually a IRR-6.02% semiannual Ob. IRR 12% semiannual OcIRR-623% semiannual Od. IRR-3% semiannual
- Hadeel borrows money in the senior year to buy a new car. The car dealership allows to defer payments for 12 months, and Hadeel makes 36 end of month payments thereafter. If the original loan is $24,000 and interest rate is 0.5% per month on the unpaid balance, how much will Hadeel payments be? $698.80 $774.62 $620.65 $700.56 detailed answer without usage of excelNoneThe equivalent amount of money that can be spent seven years from now in lieu of spending $50,000 now at an interest rate 18% per year is closest to:a. $15,700b. $159,300c. $199,300d. $259,100
- At a compound interest rate of 10% per year, $10,000 one year ago is equivalent to this amount now:a. $8,264b. $9,091c. $11,000d. $12,100E1-22 - What is the present value (PV) of the following investments? Payment $250 per week starting week 0 for 10 years. Interest Rate is 2.25% per semiannual. Solve using excelCompute the accumulated amounts after 5 years of P1,000 invested at the rate of 10% per year compounded 3) quarterlyA. P1,645.31 B. P1,638.62 C. P1,648.72 D. P1,648.61
- Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen). The MARR is 10% per year. Capital investment Annual expenses Useful life Market value at end of useful life Lead Acid $7,000 $2,750 The PW of the Lead Acid is $ The PW of the Lithium lon is $ 6 years $0 Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year. Lithium Ion Lead Acid (a) Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 18 years. Lithium Ion $11,000 $2,100 (Round to the nearest dollar.) (Round to the nearest dollar.) 9 years $3,000 Which alternative should be selected? Choose the correct answer below. The AW of the Lead Acid is $. (Round to the nearest dollar.) The AW of the Lithium Ion is $. (Round to the nearest dollar.) (b) Determine which alternative should be selected based on the AW method, also assuming repeatability. Which alternative should be selected?…6-5. A company is comparing two heating options for a new research building with an 8% annual interest rate. Which option is more cost-effective? (6.4) Gas Heating: Initial cost of $425,000, $2,500 yearly maintenance for 20 years, and $8,000 yearly energy cost rising 5% annually. Geothermal Heating: Initial cost of $300,000, no energy cost, but $10,000 yearly maintenance for 20 years. kDetermine the present equivalent value of the following cash flow pattern when i =8% per year.