Answer Happy

Problem 4 (14 points): A local enterprise that recently started operations is considering buying a new machine that is needed for their production process. The cost of the new machine is $40,000. A down payment of % of the cost is required by the machine builder to start building it. The owner has the money for the down payment, but the rest of the cost will be covered by a loan with the following details: the principal of the loan would be paid in three equal yearly payments each payment includes the principal and the interest of the unpaid balance at the time the payment is made the bank will charge an interest of 10% per year Calculate the total cost of the machine (after three years) by developing a loan repayment schedule. Comment on the result.