Homework Answers
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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