What are the annual end-of-year payments

Reference no: EM13205995

Your firm wants to purchase a $50,000 computer, no money down. The $50,000 will be paid off in 10 equal end-of-year payments with interest at 8% on the unpaid balance.

a. What are the annual end-of-year payments?

b. What hourly charge should be included to pay off the computer, assuming 2,000 hours of work per year, credited at the end of the year?

c. Assume that 5 years from now you would like to trade in the computer and purchase a new one. You expect a 5% increase in price each year. What would the new computer cost at the end of year 5?

d. What is the unpaid balance on the current computer after 5 years?

Reference no: EM13205995

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