What is the balloon that rewash inc will have to pay

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Q1. The City of Meyers is considering a treatment plant with an initial investment of $12 million and a life of 30 years. The city uses a rate of 4% per year compounded yearly. If the plant would be needed indefinitely, what is the total investment that the city should budget for the project?

Q2. Rewash Inc., would like to purchase a machine at a cost of $175,000 with a life of 6 years. Their bank is ready to finance 90% of the machine at a rate of 6% per year compounded weekly if Rewash agrees to a payment of $1,300 per month and the remaining as a balloon payment at the end of the machine life. What is the balloon that Rewash Inc., will have to pay?

Reference no: EM133187287

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