In December 2022, the U.S. Department of Energy announced the achievement of fusion ignition. This breakthrough in nuclear fusion could mean near-limitless energy in the future. However, the commercialization of fusion energy could still be decades away. This is due in part to significant engineering challenges (e.g., development of casing materials, powerful lasers for nuclear fusion, etc.).
As part of a new program to advance engineering solutions for the commercialization of fusion energy, the Dallas engineering firm 'SRV Engineering' will get a loan of $40 million. To pay this loan back, the firm will make monthly payments of $447,000 during 12 years.
TASK 1:calculate the following:
- The monthly rate for this loan
- The annual rate for this loan
- The effective annual rate for this loan
- Total amount paid after 12 years
TASK 2:SRV Engineering understands the risk of getting too deeply into debt. Suppose that instead of getting a $40 million loan and paying $447,000 monthly, the firm decides to make an investment. They will make monthly deposits of $447,000 into an investment account. This investment pays 4.5% annual interest rate. How much would the firm have in this investment after 12 years?
- Note 1: deposits are made at the end of each month
- Note 2: no initial investment was made before monthly payments, i.e., the initial investment amount is $0
In December 2022, the U.S. Department of Energy announced the achievement of fusion ignition. This breakthrough in nuclear fusion could mean 'near-limitless energy' in the future. However, the commercialization of fusion energy could still be decades away. This is due in part to significant engineering challenges (e.g., development of casing materials, powerful lasers for nuclear fusion, etc.). As part of a new program to advance engineering solutions for the commercialization of fusion energy, the Dallas engineering firm 'SRV Engineering' will get a loan of $40 million. To pay this loan back, the firm will make monthly payments of $447,000 during 12 years. You're helping the firm assess the impact of this loan on their finances. Using your Excel skills and understanding of financial functions, calculate the following: - The monthly rate for this loan - The annual rate for this loan - The effective annual rate for this loan - Total amount paid after 12 years SRV Engineering understands the risk of getting too deeply into debt. Suppose that instead of getting a $40 million loan, the firm decides to make an investment. They will make monthly deposits of $447,000 into an investment account. This investment pays 4.5% annual interest rate. How much would the firm have in this investment after 12 years? - Note 1: deposits are made at the end of each month - Note 2: no initial investment was made before monthly payments, i.e., the initial investment amount is $0 SRV Engineering understands the risk of getting too deeply into debt. Suppose that instead of getting a $40 million loan, the firm decides to make an investment. They will make monthly deposits of $447,000 into an investment account. This investment, pays 4.5% annual interest rate. How much would the firm have in this investment after 12 years? - Note 1: deposits are made at the end of each month - Note 2: no initial investment was made before monthly payments, i.e., the initial investment amount is $0 In December 2022, the U.S. Department of Energy announced the achievement of fusion ignition. This breakthrough in nuclear fusion could mean 'near-limitless energy' in the future. However, the commercialization of fusion energy could still be decades away. This is due in part to significant engineering challenges (e.g., development of casing materials, powerful lasers for nuclear fusion, etc.). As part of a new program to advance engineering solutions for the commercialization of fusion energy, the Dallas engineering firm 'SRV Enisineering' will get a loan of $40 million. To pay this loan back, the firm will make monthly payments of $447,000 during 12 years. You're helping the firm assess the impact of this loan on their finances. Using your Excel skills and understanding of financial functions, calculate the following: - The monthly rate for this loan - The annual rate for this loan - The effective annual rate for this loan - Total amount paid after 12 years In December 2022, the U.S. Department of Energy announced the achievement of fusion ignition. This breakthrough in nuclear fusion could mean 'near-limitless energy' in the future. However, the commercialization of fusion energy could still be decades away. This is due in part to significant engineering challenges (e.g., development of casing materials, powerful lasers for nuclear fusion, etc.). As part of a new program to advance engineering solutions for the commercialization of fusion energy, the Dallas engineering firm 'SRV Engineering' will get a loan of $40 million. To pay this loan back, the firm will make monthly payments of $447,000 during 12 years. You're helping the firm assess the impact of this loan on their finances. Using your Excel skills and understanding of financial functions, calculate the following: - The monthly rate for this loan - The annual rate for this loan - The effective annual rate for this loan - Total amount paid after 12 years SRV Engineering understands the risk of getting too deeply into debt. Suppose that instead of getting a $40 million loan, the firm decides to make an investment. They will make monthly deposits of $447,000 into an investment account. This investment pays 4.5% annual interest rate. How much would the firm have in this investment after 12 years? - Note 1: deposits are made at the end of each month - Note 2: no initial investment was made before monthly payments, i.e., the initial investment amount is $0 SRV Engineering understands the risk of getting too deeply into debt. Suppose that instead of getting a $40 million loan, the firm decides to make an investment. They will make monthly deposits of $447,000 into an investment account. This investment, pays 4.5% annual interest rate. How much would the firm have in this investment after 12 years? - Note 1: deposits are made at the end of each month - Note 2: no initial investment was made before monthly payments, i.e., the initial investment amount is $0 In December 2022, the U.S. Department of Energy announced the achievement of fusion ignition. This breakthrough in nuclear fusion could mean 'near-limitless energy' in the future. However, the commercialization of fusion energy could still be decades away. This is due in part to significant engineering challenges (e.g., development of casing materials, powerful lasers for nuclear fusion, etc.). As part of a new program to advance engineering solutions for the commercialization of fusion energy, the Dallas engineering firm 'SRV Enisineering' will get a loan of $40 million. To pay this loan back, the firm will make monthly payments of $447,000 during 12 years. You're helping the firm assess the impact of this loan on their finances. Using your Excel skills and understanding of financial functions, calculate the following: - The monthly rate for this loan - The annual rate for this loan - The effective annual rate for this loan - Total amount paid after 12 years
