Question 4: Solve the following problems : - (20 points)

2- Suppose a firm wants to purchase a piece of machinery. To do this it borrows 150,000 to be repaid in 3 equals payments at the end of each year. The interest rate that is paid to the lender is 15% on the outstanding portion of the loan. Calculate the loan balance after the payment of each annuity by using the loan amortization schedule. (4 Points)

- An investor wants to earn 200,000 in 10 years by making equal semi-annual deposits at the beginning of each. The bank will pay an interest of 10 percent annually. What must the semi-annual deposit be? (2 point)

1. You were given the cash flows for two investment (A,B), choose the best investment by Calculating the present value for each one, assuming a 10% discount rate. (4 points) End of Year Investment A Investment B 1 300 2. 300 350 3 300 350 4 350 5