A forklift truck costs $29,000. A company agrees to purchase such a truck with the understanding that
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A forklift truck costs $29,000. A company agrees to purchase such a truck with the understanding that it will make a single payment for the balance due in 3 years. The vendor agrees to the deal and offers two different interest schedules. The first schedule uses an annual effective interest rate of 13%. The second schedule uses 12.75% compounded continuously.
(a) Which schedule should the company accept?
(b) What would be size of the single payment?
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P 29000 n 3 years F a i a 013 F P 1 i n 29000 113 3 41844 b r 01275 F P e rn 29000 e 012753 290...View the full answer
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