Rework Problem 4-47 assuming the construction bonds had been retired as an annuity (i.e., equal uni-form annual

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Rework Problem 4-47 assuming the construction bonds had been retired as an annuity (i.e., equal uni-form annual payments had been made to repay the $35 million).


Data from Problem 4-47:

A piece of airport baggage handling equipment can be purchased for $80,000 cash or for $84,000 to be financed over 60 months at 0% interest. This special offer is good for only the next two days. The salesperson states that at least $20,000 can be saved by the 0% offer compared to their “traditional” financing plan at 0.75% per month over 60 months. Is this claim really true? Show all your work.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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Engineering Economy

ISBN: 978-0133439274

16th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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