Complete each problem in excel. Submit your excel worksheet in EXCEL format so I can see how you solved the problems.

Please MARK or Outline your answers so I can tell where they are.

See questions below.

Problem 1 8 Points

You need equipment at the business and are considering a loan for $75,215 at 4.9% interest over 5 years.

Show two DIFFERENT ways and calculate the results that demonstrate financial equivalence for this problem.

I am looking for two different methods using COMPOUND INTEREST.

Do not show me simple and compound interest. DO NOT simply change the compounding term (IE. A daily, mothly, yearly calculation)

Do not show me two clacualtions that give the same solution. (IE Excel formula and hand calcualtion)

How much will you pay over the life of the loan in each way?

Briefly explain the concept of financial equivalence. Tell me the book definition. Tell me what that means in your own words.

I need to see BOTH definitions.

Problem 2 4 Points

You are buying a new truck for your business. It will cost $49,500 and the dealership is offfering you 4.2% interest.

You and the lender have agreed that this loan will be payed back in ONE payment at the end of the 5 years.

How much will you pay if the lender charges compound interest?

How much will you pay if the lender charges simple interest?

Problem 3 8 Points

You want to buy a boat when you retire. It's a big one and you will need $195,000 in the bank when you retire in 13 years to buy it.

You have $65,0000 to open the account and you will deposit $500 at the end of each month.

What yearly rate will you need in the market for this to work? YEARLY RATE