What is the effective annual interest rate for payment plan

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1. At 7.0% effective annual interest, how much should be deposited at the start of each year for 10 years (10 deposits) in order to start drawing out $200 at the end of the year for 10 additional years (10 withdrawals) starting at the end of the fourth year? Show the CFD and solve.

2. What is the effective annual interest rate for a payment plan of 30 equal payments of $73.00 per month to buy a refrigerator when a lump sum payment of $1,883.97 would have been an outright purchase? Show the CFD and solve.

3. You borrow $600 from your roommate and agree to pay interest of 2.0% per month on each remaining amount and provide the final payment by the end of month 8. You pay $70.00 per month for the first 7 months. How much will you owe for your final payment

4.A rural stretch of a two lane road in Loudoun County is to be refurbished or a new route established. The existing road, E, will cost $3,000,000 and the new route, N, will cost $5,000,000. Annual O&M costs will be $120,000 for E and $90,000 for N. Annual user costs are estimated to be $880,000 for E and $660,000 for N. The interest rate for the County's capital programming is 5% compounded annually. Use a Planning Horizon of 20 years and Salvage Values of 60% of first cost. Compute the B/C Ratio you believe to be relevant.

Reference no: EM13180593

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