a. A piece of machinery depreciates in value by 5% a year. Determine its value in 3
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a. A piece of machinery depreciates in value by 5% a year. Determine its value in 3 years’ time if its current value is $50 000.
b. Simon decides to buy a new sofa which is available at each of three stores at the same fixed price. He decides to borrow the money using each store’s credit facility.
Store A has an effective rate of interest of 12.6%.
Store B charges interest at a rate of 10.5% compounded continuously.
Store C charges interest at a rate of 11.5% compounded quarterly
c. Determine the monthly repayments needed to repay a $125 000 loan which is paid back over 20 years when the interest rate is 7% compounded annually. Round your answer to 2 decimal places.
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