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.)
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