Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.
Sagot :
Answer:
The correct option is c. An amount equal to or greater than $25,000 but less than $36,000.
Step-by-step explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question as follows:
Amazon Rafting just bought a new trailer. To pay for the trailer, the company took out a loan that requires Amazon Rafting to pay the bank a special payment of $8,700 in 5 years and also pay the bank regular payments of $4,100 each year forever. The interest rate on the loan is 14.3 percent per year and the first $4,100 yearly payment will be paid in one year from today. What was the price of the trailer?
a. An amount less than $14,000 or an amount equal to or greater than $62,000
b. An amount equal to or greater than $14,000 but less than $25,000
c. An amount equal to or greater than $25,000 but less than $36,000
d. An amount equal to or greater than $36,000 but less than $49,000
e. An amount equal to or greater than $49,000 but less than $62,000
The explanation of the answer is now provided as follows:
The price of the trailer can be calculated using the following formula:
Price of the trailer = (Special payment in 5 years / (1 + r)^n) + (Annual regular payment forever / r) .................... (1)
Where:
Special payment in 5 years = $8,700
r = Interest rate = 14.3% or 0.143
n = number of years = 5
Annual regular payment forever = $4,100
Substituting the values into equation (1), we have:
Price of the trailer = ($8,700 / (1 + 0.143)^5) + ($4,100 / 0.143)
Price of the trailer = ($8,700 / 1.95088267511394) + $28,671.33
Price of the trailer = $4,459.52 + $28,671.33
Price of the trailer = $33,130.85
Since the calculated price of the trailer is $33,130.85, the correct option is c. An amount equal to or greater than $25,000 but less than $36,000.
We appreciate your time on our site. Don't hesitate to return whenever you have more questions or need further clarification. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.