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Assume ABC Corp. finances a new manufacturing machine with a $230,000 loan, which it plans to pay for with 10-year annuity payments that will begin next year. Assuming the interest rate is 8.2% and it will compound annually, which of the following is true? O ABC Corp. would have paid less each year with a lower interest rate. ABC Corp. will need to pay $34,586.63 each year, paying back in full 10 years from now Both are correct Neither are correct

Assume ABC Corp. finances a new manufacturing machine with a $230,000 loan, which it plans to pay for with 10-year annuity payments that will begin next year. Assuming the interest rate is 8.2% and it will compound annually, which of the following is true? O ABC Corp. would have paid less each year with a lower interest rate. ABC Corp. will need to pay $34,586.63 each year, paying back in full 10 years from now Both are correct Neither are correct

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Assume ABC Corp. finances a new manufacturing machine with a $230,000 loan, which it plans to pay for with 10-year annuity payments that will begin next year. Assuming the interest rate is 8.2% and it will compound annually, which of the following is true? O ABC Corp. would have paid less each year with a lower interest rate. ABC Corp. will need to pay $34,586.63 each year, paying back in full 10 years from now Both are correct Neither are correct
Transcribed Image Text:Assume ABC Corp. finances a new manufacturing machine with a $230,000 loan, which it plans to pay for with 10-year annuity payments that will begin next year. Assuming the interest rate is 8.2% and it will compound annually, which of the following is true? O ABC Corp. would have paid less each year with a lower interest rate. ABC Corp. will need to pay $34,586.63 each year, paying back in full 10 years from now Both are correct Neither are correct
Alpha Company invests $15,000 at an interest rate of 14% for five years. What is the difference between simple and compound interests? Assume that in case the interest rate compounds annually. O $2,985.52 $3,381.22 O $2,593.27 O $3,952.56
Transcribed Image Text:Alpha Company invests $15,000 at an interest rate of 14% for five years. What is the difference between simple and compound interests? Assume that in case the interest rate compounds annually. O $2,985.52 $3,381.22 O $2,593.27 O $3,952.56
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