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Directions: Answer the annuity and amortization problem and draw the cash flow diagram A lathe for a machine shop cost $60,000 if paid in cash.

Directions: Answer the annuity and amortization problem and draw the cash flow diagram

  1. A lathe for a machine shop cost $60,000 if paid in cash. On installment plan, a purchaser should pay $20,000 down payment and 10 quarterly installments, the first due at the end of 5th year after purchase. If the money is worth 15% compounded quarterly, determine the quarterly installment.

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