1. Diana borrowed $3,000 from Pam and promised to pay her $3,405 after 1.5 years
ID: 1091429 • Letter: 1
Question
1. Diana borrowed $3,000 from Pam and promised to pay her $3,405 after 1.5 years. What simple interest rate did she have in mind?
2. How long does it take double an investment of $10,000 if the investment pays a monthly interest of $150?
3. Amy Brown borrowed $1,000 at 8% interest compounded annually. She plans to pay off the loan as per the schedule below. The fourth payment, Y will have to be ___________.
4. A series of end -of -the -year cash flows of $2,000 for ten years at an annual interest rate of 8% is nearly equal to a series of end -of -the -year cash flows at 10% interest for eight years. Determine the value of the uniform amount, A.
5. Amy Brown borrowed $1,000 at 8% interest compounded annually. She plans to pay off the loan as per the schedule below. The fourth payment, Y will have to be ___________.
6. The first unit produced in a plant took about 7.348 hours. If the learning curve is 95%, the time required to produce the 8th unit may be estimated to be ________.
7. Given: Total fixed cost = $320. Variable cost/unit = $20. Revenue/unit = $30.
The breakeven volume is _____________.
8. What is the present worth of a series of ten deposits of $200 per year at 6% made at the end of each year?
9. An engineering freshman wants to purchase a laptop to use during the five years that she plans to study engineering at Tech. (Now that's good planning!) After looking around a bit, she finds that a well-equipped laptop can be purchased for $1,250. The laptop would have a market value of $100 if she sells it when she graduates after five years. Assume that no maintenance will be required. Use an interest rate of 9% with monthly compounding. Determine the monthly cost of owning the computer.
Year Repayment Amount 1 $100 2 $300 3 $500 4 YExplanation / Answer
P=$3,000
A=3,405
S.I.=A-P=$3405-$3,000=$405
time=1.5 year=3/2
rate= S.I. *100/(P*T)
=405*100?(3000*1.5)=9% per year
8.)present worth,A=P(1+R/100)n
=$200(1+6/100)10 =$358.169
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