Question

Question 1 0.25 pts This is an extra credit question. It is optional. Bosley is given the annual worth of a project as $21,347, but now his boss wants to know the present worth. The company uses a MARR of 4% interest. The project has a lifespan of 6 years. Enter your answer using this format: 12345.67 Do not use a dollar sign ("$") or any commas (""). Question 2 0.25 pts Hector just bought a house. He borrowed $450,913 from the bank. The bank charges a nominal annual interest rate of 3%, compounded monthly. How much will Hector's monthly loan payment be for 40 years? Enter your answer using this format: 12345.67 Do not use a dollar sign ("$") or any commas ("").

Answer 1

1.

Present worth = 21347 * (P/A, 4%,6)

= 21347 * 5.242137

= 111903.90

2.

I = 3% / 12 = 0.25% per month

t = 40 * 12 = 480 months

Monthly payment = 450913 * (A/P, 0.25%,480) = 450913 * 0.003580 = 1614.20

3.

Schlorship each year = 683669 * 0.04 = 27346.76