Find the value of the annual gradient change

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Reference no: EM131300404

1. You want to buy a machine with the present worth of QR 100,000. You were able to finance it through a contract. The bank has set its monthly rate of return a 1.5% to be paid over 7 years. The first payment (to be paid at end of the first year) is QR 10,000. At the end of each subsequent year, the payment changes according to a geometric gradient according to a certain percentage. Find the percentage for this geometric gradient change (g) to cover the whole payment by the end of the 7th year.

2. In problem 2, if the contract was conducted with an arithmetic (linear) gradient, find the value of the annual gradient change (G).

Reference no: EM131300404

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