Question

A manufacturer of towers, rotators, and antennas is seeking to capture the high-end market in altazimuth and elevation rotators for use with large six-meter earth-moon-earth (EME) stacked antenna arrays. The company takes out a $55,000 loan for development of the rotator and will pay it back in 4 equal yearly payments; however, the 1^st payment will not occur until the end of year 3. Interest is 10% per year.

Answer 1

Solution :-

Interest Rate per year (r) = 10%

Loan Amount = $55,000

Value of Loan after two Years = $55,000 * ( 1 + 0.10 )² = $66,550

Now Assume the Equal Payment be X

Total Installments ( N ) = 4

Now as per data

= $66,550 = X * PVAF ( 10% , 4 )

= $66,550 = X * [ 1 - ( 1 + 0.10 )^-4 ] / 0.04

X * [ 1 - 0.683 ] = $2,662

X * [ 0.317 ] = $2,662

X = $8,397.83

Therefore the amount of Yearly Payment = $8,397.83

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