Look up the numerical value for the following factors from the compound interest

Question

Look up the numerical value for the following factors from the compound interest factor tables. 1. (F/P, 10%, 7) 2. (A/P, 12%, 10) 3. (P/G, 15%, 20) 4. (F/A, 2%, 50) 5. (P/G, 35%, 15) How much money should a bank be willing to loan a real estate developer who will repay the loan by selling seven lakefront lots at exist120,000 each 2 years from now? Assume the bank's interest rate is 10% per year. How much could BTU Oil & Gas Tracking afford to spend on new equipment each year for the next 3 years if it expects a pro t of exist50 million 3 years from now? Assume the company's MARR is 20% per year. Find the numerical value of the following factors by (a) linear interpolation, (b) using the appropriate formula, and (c) a spreadsheet function. 1. (F/A, 19%, 20) 2. (P/A, 26%, 15) An arithmetic cash ow gradient series equals exist500 in year 1, exist600 in year 2, and amounts increasing by exist100 per year through year 9. At i = 10% per year, determine the present worth of the cash ow series in year 0.

Explanation / Answer

2)

2.4)

present value = 120000 * 7/(1+10%)^2

= 694214.88

2.10)

x * [(1+20%)^3 -1]/20% = 50,000,000

spending per year = 13,736,263.74

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