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Question 1 1. The Namibian News paper offers a one-year subscription at the cost N$150 with renewal the following year at N$ 165. Also offered

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Question 1 1. The Namibian News paper offers a one-year subscription at the cost N$150 with renewal the following year at N$ 165. Also offered is a two-year subscription at a cost of N$280. What is the effective annual interest rate that makes the two-year subscription equivalent to two successive one-year subscription? 2. A manufacturer can automate a certain process by replacing 20 employees with a machine. The employees each earn N$ 24 000 per year, with the payments on the last day of each month, with no salary increases scheduled for the next 4 years. If the machine has a lifetime of 4 years and interest is at a monthly rate of 0.75%, what is the most the manufacturer would pay for the machine (on the first day of the month) in each of the following cases? (a) The machine has no scrap value at the end of 4 years. (b) The machine has scrap value of N$ 200 000 after 4 years. (c) The machine has serap value of 15% of its purchase price at the end of 4 years. 3. Willy has a debts of N$ 1000 due now and N$ 1092 due two years from now. He proposes to repay them with a single payment of N$ 2000 one year from now. What id the implied effective annual interest rate if the replacement payment is accepted as equivalent to the original debts? 14

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