Question

Present value with periodic rates.   Sam​ Hinds, a local​ dentist, is going to remodel the dental...

Present value with periodic

rates.

  Sam​ Hinds, a local​ dentist, is going to remodel the dental reception area and add two new workstations. He has contacted​ A-Dec, and the new equipment and cabinetry will cost

​$24,000.

The purchase will be financed with an interest rate of

9​%

loan over

8

years. What will Sam have to pay for this equipment if the loan calls for

semiannual

payments

​(2

per​ year) and

monthly

payments

​(12

per​ year)? Compare the annual cash outflows of the two payments. Why does the

monthly

payment plan have less total cash outflow each​ year?

What will Sam have to pay for this equipment if the loan calls for

semiannual

payments

​(2

per​ year)?

​$2,136.372,136.37

​ (Round to the nearest​ cent.)What will Sam have to pay for this equipment if the loan calls for

monthly

payments

​(12

per​ year)?

​$nothing  

​(Round to the nearest​ cent.)

Business   Economics   
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