# Drilling machine

A manufacturing firm purchased a heavy duty drilling machine. They were given two payment options:

Option 1: Make a payment of $46,000 immediately to settle the invoice for the machine.

Option 2: Make a payment of $21,500 immediately and the balance of $23,550 in 3 months to settle the invoice.

If money is worth 4.12% compounded quarterly, answer the following:

What is the total present value of Option 2?

Option 1: Make a payment of $46,000 immediately to settle the invoice for the machine.

Option 2: Make a payment of $21,500 immediately and the balance of $23,550 in 3 months to settle the invoice.

If money is worth 4.12% compounded quarterly, answer the following:

What is the total present value of Option 2?

**Result****Leave us a comment of this math problem and its solution (i.e. if it is still somewhat unclear...):**

**Showing 1 comment:**

**Dr Math**

From our user:

Hi Peter,

Thank you for your time, I have checked your answer and it is still showing as wrong.

Hi Peter,

Thank you for your time, I have checked your answer and it is still showing as wrong.

#### Following knowledge from mathematics are needed to solve this word math problem:

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