Principal Interest Years

150000 8% 3

12000 simple interest per annum

Cumulative value of principal and simple interest = 150000 + (3 * 12000) = 186000.00

Compound interest cumulative value of principle = 188956.80

Monthly compound interest = 190535.56

EAR = 0.083

Daily compund interest = 190682.36

EAR = 0.083
Interest 3%

a Future Value 20000

5 years
PV 17252.18

b Future Value 150000

25 years
PV 71640.84
Interest 0.25
Frequency 365

EAR 0.2839
 Machine A Machine B Interest = 15%
Cost 4000 3900
Year 0 Revenue -4000 -3900 Rev after C.i Rev after C.i
Year 1 Revenue 2000 1500 1739.13043478 1304.34782609
Year 2 Revenue 2500 2500 1890.35916824 1890.35916824
Year 3 Revenue 1500 2000 986.274348648 1315.03246486
615.763951673 609.739459193
Net Present Value 615.76 609.74

The NPV is positive for both A and B, this indicates that the projected
earnings exceed the costs. Therefore both A and B will make profits
however as A has a higher NPV, it will make more profit than B.

Assumptions: No inflation, assumes there is no unexpected

expenditure and costs
 Mac A Mac B
Start 1(pv large sum) 4615.764 4509.739
t interest 692.3646 676.4609
5308.129 5186.2
pay out( start of y2) 3308.129 3686.2
Year 2 interest 496.2193 552.9301
3804.348 4239.13
Pay out( start of y3) 1304.348 1739.13
year 3 interest 195.6522 260.8696
1500 2000
Pay out( start of y4) 0 0

-15.3940987918
-15.6343451075
TV cost K 2500
Interest(Monthly) r 24.90%
Number of payments t 36
Total value of interest 622.5
Interest and TV cost total 3122.5
Monthly payment 86.7361111

Capital payment for first payment

P1=K[r/((1+r)^t) -1]