6) EMI formula = [P * r * (1 + r)^n] / [(1 + r)^n - 1]
P = 1,000,000
r = 18% = 0.18
n = 15
EMI = [1,000,000 * 0.18 * (1 + 0.18)^15] / [(1 + 0.18)^15 - 1] = 196,402.78
Company has to pay 196,402.78 annually to the bank.
7) First deposit = $4,000 which rises by $500 each year
Interest rate = 15%
Future value is calculated as: [Money saved * (1 + Rate of Interest)^Money saved for years]
Year | Money saved | Years for which money is saved | Future value |
1 | 4,000.00 | 9 | 14,071.51 |
2 | 4,500.00 | 8 | 13,765.60 |
3 | 5,000.00 | 7 | 13,300.10 |
4 | 5,500.00 | 6 | 12,721.83 |
5 | 6,000.00 | 5 | 12,068.14 |
6 | 6,500.00 | 4 | 11,368.54 |
7 | 7,000.00 | 3 | 10,646.13 |
8 | 7,500.00 | 2 | 9,918.75 |
9 | 8,000.00 | 1 | 9,200.00 |
10 | 8,500.00 | - | 8,500.00 |
115,560.60 |
Future value of money saved at the end of 10 years is 115,560.6
6. A bank gives a loan to a company to purchase an equipment worth 10,00,000 US...
6. A bank gives a loan to a company to purchase an equipment worth 10,00,000 US. Dollars at an interest rate of 18% compounded annually. This amount should be repaid in 15 yearly equal installments. Find the installment amount that the company has to pay to the bank. 7. A person is planning for his retired life. He has 10 more years of service. He would like to deposit 20% of his salary, which is 4.000 US. Dollars at the...
5. A company wants to set up a reserve which will help the company to have an annual equivalent amount of 10,00,000 US. Dollars for the next 20 years towards its employees welfare measures. The reserve is assumed to grow at the rate of 15% annually. Find the single-payment that must be made now as the reserve amount. 6. A bank gives a loan to a company to purchase an equipment worth 10,00,000 US. Dollars at an interest rate of...
4:09 1 OK. 73% INDE232-HOMEWORK1 - Read-only Read Only - You can't save changes to this file. V INDE232 ENGINEERING ECONOMICS STUDY QUESTIONS- HOMEWORK 1 1. How much should be put in an investment with a 10% effective annual rate today to have $10,000 in five years? 2. A person wishes to have a future sum of 100,000 US Dollars for his son's education after 8 years from now. What is the single-payment that he should deposit now so that...
The Purchase of a car requires a $25,000 loan to be repaid in monthly installments for four years at 12% interest compounded monthly and the general inflation is 6% compounded monthly. a) Find the actual & constant dollar value of the 20th payment. b) The total loan payback amount in constant & actual dollars.
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year. Option B: Interest is to be received on a yearly basis and the Principal is to be receivedat the end. All loan repayment items are end-of-year payments. Which options...
Joe secured a loan of $12,000 two years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 5%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amortizing it through monthly payments over 15 years at the same interest rate. Find the size of the monthly payments he will be required to make. (Round your answer to the nearest cent.) $
5(a) A company is discussing a $0.5 million loan with a bank. The interest rate is 12% compounded annually and the repayment period is 5 years. The bank is offering two options for loan repayment: Option A: Payments are to be received in equal installments at the end of each year Option B: Interest is to be received on a yearly basis and the Principal is to be received at the end All loan repayment items are end-of-year payments Which...
6. bu A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $60,000 for the next 15 years. How much must he deposit if the annual interest rate is 6% compounded quarterly? (Note that the last deposit is made on the date of the end of 20th year, and first withdrawal is at the...
6. A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $60,000 for the next 15 years. How much must he deposit if the annual interest rate is 6% compounded quarterly? (Note that the last deposit is made on the date of the end of 20th year, and first withdrawal is at the end...
6. bu A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $60,000 for the next 15 years. How much must he deposit if the annual interest rate is 6% compounded quarterly? (Note that the last deposit is made on the date of the end of 20th year, and first withdrawal is at the...