Please show your work for each. 1. A manufacturing company borrows $100,000 with
ID: 2506528 • Letter: P
Question
Please show your work for each.
1. A manufacturing company borrows $100,000 with a promise to repay the loan with equal annual payments over a 10-year period. At an interest rate of 12% per year, the annual payment would be closest to: (A) $13,600 (B) $15,400 (C) $17,700 (D) $19,800
2. Income from sales of a certain oil additive has been averaging $100,000 per year. At an interest rate of 18% per year, the present worth of the income for 5 years in closest to: (A) $296,100 (B) $312,700 (C) $328,400 (D) $335,100
3.An investment of $100,000 resulted in income of $25,000 per year for 10 years. The rate of return on the investment was closest to: (A) 15% (B) 17% (C) 21% (D) 25%
4. A construction company invests $50,000 in a new bulldozer. If the income from temporary leasing of the bulldozer is expected to be $100,000 per year, the length of time required to recover the investment at an interest rate of 18% per year is closest to: (A) 5 years (B) 8 years (C) 11 years (D) 14 years
Explanation / Answer
1.)
with an interest of 12%, total amount paid after 10 year =((12% of 100,000)*10)+100,000
=220,000
if he paid equally in all year
so, per year payment=220000/10=22000
so it would be closest to $19,800
D) $19,800 ans
2.)
same process as above,
D) $335,100 ans
3.)simple
(A) 15% ans
4.)
investment =$50,000
per month benefit=100000/12=$8333.33
per month interest=$9000/12=$750
net profit=$7583.33 per month
so, month required to regain
(A) 5 years ans