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3. Webster Mining is considering the purchase of a new sorting machine. The quote consists of a quarterly payment of $29,600
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Answer #1

We need to find the present value of the machine for which we will have installments of $29,600 per quarter with an annual percentage of 8% interest.

To calculate this we will use the PV formula in excel. As the installments are quarterly we will multiply the number of years by 4 and divide the interest rate by 4 to get the calculation right.

Particulars Amount
Interest Rate 2%
Installment Amount 29600
No of installments 28
Future Value of the Investment 0.00
Present Value -6,29,925.66

The present value of the machine is 629,925.66. Ignore the negative sign in the answer.  

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