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111131 12. Present and future Value Problems. Kangaroo Autos is offering zero interest rate on a new $10,000 car. You pay $1,000 down and then
111131 12. Present and future Value Problems. Kangaroo Autos is offering zero interest rate on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer zero interest rate but will give you $1,000 off the list price. If the rate of interest is 1% a month, which company is offering the better deal? (5 points) 13. Present and Future Value Problems. Exeter Inc. has $75,000 invested in securities that earn a return of 16% compounded quarterly. The company is developing a new product that it plans to launch in two years at a cost of $500,000. Exeter's cash flow is good now but may not be later, so management would like to bank money from now until the launch to be sure of having the $500,000 in hand at that time. The money currently invested in securities can be used to provide part of the launch fund. Exeter's bank has offered an account that will pay 12% compounded monthly. How much should Exeter deposit with the bank each month to have enough reserved for the product launch? (5 points) Mortgages. Suppose that you take out a $200,000, 20-year mortgage loan to buy a condo. The est rate on the loan is 6%, and payments on the loan are made annually at the end of each ye King Support Services WS agewooddu Stol reshme 12. Present and Future Value Problems. Kangaroo Autos is offering zero interest rate on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer zero interest rate but will give you $1,000 off the list price. If the rate of interest is 1% a month, which company is offering the better deal? (5 points)
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