• Engineering Economy and System Analysis

QUESTION 1| How much can Wells Fargo lend to a developer who will repay the loan by selling 6 View lots at $190,000 each 2 years from now? Assume the bank will lend at a nominal 14% per year, compounded W QUESTION 2 Many college students have Visa credit cards that carry an interest rate of \"simple 24% per year" (that is, 2% per month). When the balance on such a card is $5000, the minimum payment is $110.25. (a) What is the amount of interest in the rst payment? (b) How long will it take, in months, to pay offthe balance, if the cardholder continues to make payments of $110.25 per month and adds no other charges to the card? QUESTION 2 Many small companies use accounts receivable as collateral to borrow money for continuing operations and meeting payrolls. If a company borrows $300,000 now at an interest rate of 1% per month, but the rate changes to 1.25% per month after 4 months, how much will the company owe at the end of 1 year