You want to purchase a building to open your restaurant and you are given 3 different payment schedules: i. Pay $66,000 in cash, upfront. ii. Pay equal amount of $12,900 for 8 years. iii. Immediate cash outlay of $21,000 and afterward $7,100 per year for 12 years Determine which schedule is least expensive and most expensive if the interest rate is 12.5%, compounded continuously. Answer must be justified by complete solution.
You want to purchase a building to open your restaurant and you are given 3 different payment schedules: i. Pay $66,000 in cash, upfront. ii. Pay equal amount of $12,900 for 8 years. iii. Immediate cash outlay of $21,000 and afterward $7,100 per year for 12 years Determine which schedule is least expensive and most expensive if the interest rate is 12.5%, compounded continuously. Answer must be justified by complete solution.
Intermediate Algebra
10th Edition
ISBN:9781285195728
Author:Jerome E. Kaufmann, Karen L. Schwitters
Publisher:Jerome E. Kaufmann, Karen L. Schwitters
Chapter2: Equations, Inequalities, And Problem Solving
Section2.S: Summary
Problem 8S: What interest rate would you need to get to double an investment of 200 in eight years?
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Question
You want to purchase a building to open your restaurant and you are given 3 different payment schedules:
i. Pay $66,000 in cash, upfront.
ii. Pay equal amount of $12,900 for 8 years.
iii. Immediate cash outlay of $21,000 and afterward $7,100 per year for 12 years
Determine which schedule is least expensive and most expensive if the interest rate is 12.5%, compounded
continuously. Answer must be justified by complete solution.
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