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13, A person borrows $10,000 at an interest rate of 8% per year and wishes to repay the loan over a 3-year period with annual
13, A person borrows $10,000 at an interest rate of 8% per year and wishes to repay the loan over a 3-year period with annual payments such that the second payment (i.e. in year 2) is S500 greater that the first payment and the third payment is $1,000 greater than the second payment. Determine the size of the first payment. a. $2,040 b. $2,190 c. $3,250 d. S4,380 14. Exotic Faucets and Sinks, Ltd. guarantees that their new infra-red sensor faucet will save any household that has two or more children atleast S30 per month in water costs be ginning one month after the faucet is installed. If the faucet is under full warranty for five years, the minimum amount a family could afford to spend now on such a faucet at an interest rate of 6% per year compounded monthly is closest to a. $149 b. $1552 C. S1787 d. $1890 15. Border Steel invested $800,000 in a new shearing unit. At an interest rate of 12% per year compounded quarterly, the quarterly income required to recover the investment in 3 years is closest to a. S69,610 b. $75,880 C. $80,370 d. $83,550 16. An engineer analyzing cost data about hydrogen sulfide monitors discovered that the information for the first three years was missing, However, he knew the cost in year 4 was $1250 and that it increased by 5% each year thereafter. If the same trend applied to the first three years, the cost in year I was: a. S1312.50 b, $1190.48 c. $1028.38 d. $1079.80 17. A plant manager wants to know the present worth of the maintenance costs for a reconditioned assembly line. An industrial engineer, who designed the system, estimates that the ma intenance costs are expected to be zero for the first three years, $2000 in year four, $2500 in year five, and amounts increasing by $500 each year through year 10. At an interest rate of 8% per year compounded semiannually, the value of n to use in the P/G equation is a. C
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