Home Assignment Max Marks 10 Q1. Demonstrate the concept of equivalence using the different loan repayment plans described below. Each plan repays a $5000 loan in 10 years at 6% interest per year. Plan 1: Simple interest, pay all at end. No interest or principal is paid until the end of year 10. Interest accumulates each year on the principal only. Plan 2: Compound interest, pay all at end. No interest or principal is paid until the end of year 10. Interest accumulates each year on the total of principal and all accrued interest. Plan 3: Equal payments of compound interest and principal made annually. Equal payments are made each year with a portion going toward principal repayment and the remainder covering the accrued interest. Q2.A chemical engineer believes that by modifying the structure of a certain water treatment polymer, his company would earn an extra $7500 per year. At an interest rate of 9% per year, how much could the company afford to spend now to just break even over a 8 year project period