Question

The Gentle Warming Company is purchasing a new cooling system. To pay for the system, the company agrees to make 12 installment payments of $6669 per year, beginning at the end of year 1. The company also has to pay a system fee of $2036 that will begin at the end of year 1 and decrease by $199 per year until the system is paid off. How much should the company set aside today to pay for the cooling system if the bank pays 3% per year compounded annually? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ($), any commas () or a decimal point ().

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Amount = installment+system fee

= 6669+2036

= 8705

P= 8705(P/A,3%,12) - 199(P/G,3%12)

= 8705(9.954) - 199(51.248)

= 86649.57 - 10198.352

= 76451

Add a comment
Know the answer?
Add Answer to:
The Gentle Warming Company is purchasing a new cooling system. To pay for the system, the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • You would like to set aside enough money to pay for the maintenance you will need...

    You would like to set aside enough money to pay for the maintenance you will need for your new car. You estimated that you will need $872 at the end of year 2, and another $1407 at the end of year 7. How much do you need to set aside today in order to pay for all of these expenses, assuming that the bank pays 8% per year compounded annually? Enter your answer as follows: 1234 Round your answer. Do...

  • Kermit is considering purchasing a new computer system. The purchase price is $104403. Kermit will borrow...

    Kermit is considering purchasing a new computer system. The purchase price is $104403. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $6409 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the...

  • Kermit is considering purchasing a new computer system.

    Kermit is considering purchasing a new computer system. The purchase price is $128663. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $6897 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the...

  • For retirement, you decide to deposit $8805 at the end of each year and you will...

    For retirement, you decide to deposit $8805 at the end of each year and you will increase your deposit by $214 per year. How much will you have at the end of 20 years if the bank pays 2.5% compounded annually? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas(") or a decimal point")

  • Kermit is considering purchasing a new computer system.

    Question 7Kermit is considering purchasing a new computer system. The purchase price is $137160. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $8614 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain...

  • Kermit is considering purchasing a new computer system. The purchase price is $148645

    Kermit is considering purchasing a new computer system. The purchase price is $148645. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3 year period. The computer system is expected to last 5 years and has a salvage value of $8162 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain...

  • You developed a new product that had a profit of $404,918 at the end of the...

    You developed a new product that had a profit of $404,918 at the end of the first year. Your marketing team believes sales will continue to increase by 6% each year. If you deposit your profits into a bank account that pays 6% each year compounded annually, how much will you have in your account in 8 years? Enter your answer as follows: 12345 Round your answer. Do not use a dollar sign ("$"), any commas (',') or a decimal...

  • Fresh Foods is considering the purchase of a new packaging system. The system costs $215,594. The...

    Fresh Foods is considering the purchase of a new packaging system. The system costs $215,594. The company plans to borrow three-quarters (3/4) of the purchase price from a bank at 8% per year compounded annually. The loan will be repaid using equal, annual payments over a 7-year period. The payments will be made at the end of each year for the life of the loan, with the first payment occurring at the end of year 1. The system is expected...

  • Futuro Co. is considering purchasing a computer system to assist in circuit board manufacturing. ...

    Futuro Co. is considering purchasing a computer system to assist in circuit board manufacturing. The system costs $100,000. It has an expected life of 7 years, at which time its salvage value will be $9,500. Operating and maintenance expenses are estimated to be $2,000 per year. If the computer system is purchased, annual manufacturing costs will be reduced by $4,000 per year. Futuro co. must borrow half of the purchase price, but they cannot start repaying the loan for 3...

  • Galvanized Products is considering purchasing a new computer system for its enterprise data management system.

    Galvanized Products is considering purchasing a new computer system for its enterprise data management system. The vendor has quoted a purchase price of $100,000 Galvanized Products is planning to borrow one fourth of the purchase price from a bank at 15% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The computer system is expected to last 5 years and has a salvage value of $5,000 at that time. Over the S-year period,...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT