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: Pay $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?

Correct answer:

a =  46473.8 USD
b =  45271.45 USD

Step-by-step explanation:

q=1+4.12/4/100=1.0103  a=46000 q=46000 1.0103=46473.8 USD
b=21500 q+23550=21500 1.0103+23550=45271.45=45271.45 USD b>a



Did you find an error or inaccuracy? Feel free to write us. Thank you!







Tips for related online calculators
Our percentage calculator will help you quickly calculate various typical tasks with percentages.
Do you want to convert time units like minutes to seconds?

You need to know the following knowledge to solve this word math problem:

Related math problems and questions: