Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 5, Problem 18P
To determine

Calculate the future worth.

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Subject: finance
Suppose you take out a car loan of $15,000 with an interest rate of 15% compounded monthly. You will pay off the loan over 36 months with equal monthly payments.(a) What is the monthly interest rate?(b) What is the amount of the equal monthly payment?(c) What is the interest payment for the 15th payment?(d) What is the total interest paid over the life of the loan?
You sit down with the world's least helpful financial advisor who never tells you the future value of any investments but will give you the other info you need. Which investment option gives you the most money at the end of 10 years?   Options:   (A) Investing $1,000 at the beginning of each year with an annual interest rate of 8.5%. Interest compounds annually.   (B) Investing $83.33 each month with an annual interest rate of 8%. Interest compounds monthly.   (C) Investing $10,000 today with an annual interest rate of 5%. Interest compounds monthly.
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