a. Mr. Kiwat borrowed GH200,000 from his bankers to buy his dream house. Repayment is over 4
Question:
Required:
i. Calculate Mr Bruces annual payments
ii. Show a table on how the annual payment will liquidate the loan and interest.
b. Cross Ltd has bought an asset with a life span of 4 years. At the end of the 4 years, replacement of the asset will cost GH12,000. In this direction, the company has decided to provide for the future commitment by setting up a sinking fund account into which equal annual investment will be made at the end of each year. Interest rate on the investment will be 12% per annum.
Required:
i. Calculate the annual installments
ii. Draw up the sinking fund schedule to show the growth fund iii. Assuming the first payments will be made now and 12 months thereafter, what are the annual payments? iv. Draw up the sinking fund schedule under(c)
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling