Question

In: Economics

In order to purchase manufacturing equipment, a company borrows $1,118,000 from a bank. The bank charges...


In order to purchase manufacturing equipment, a company borrows $1,118,000 from a bank.
The bank charges an interest rate of 3.00% per year, compounded annually.
After 3 years the company repays the bank in one single payment.
a) How much money is the company required to pay the bank?
b) How much of the money the company pays the bank is due to interest charges?

Solutions

Expert Solution

Above is the calculation.

a) Company is required to pay to the bank $ 1,221,974

b) Interest charges paid by company to Bank $ 103,974

Rahul Sunny answered 2 years ago
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