1)

How long will it take for $3,000 to grow to $10,000 at these investment yields?

a) 4% years ?

b) 8% years ?

c) 16% years ?

(may need to interpolate in the interest tables slightly)

2)

Landscaping company is considering buying a truck for $60,000 cash.The dealer has offered a lease option, in which the company can make 8 annual payments of $10,100 at year end, at a cost of 8%, to pay off the truck.

a) Which option is better?

b) Purchase price of truck?

c) PV of cost of 7 year lease?

d) Which option is better? (Lease or Buy)