ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.19 : In the purchase of a unit of engineering office, a loan has been made to a bank with the following details : Term N = 30 years; interest rate R = 8.07 % / year; security : primary residence; present value pv = $450000; salary = $75000 / year or $56000 / year after tax. (a) Let the discounted present value PV = [ 1 - 1 / (1 + r) ^ n ] / r for arrears, where r = interest rate of discount, n = number of payment, ^ = symbol for power. If the loan repayment was made monthly : (i) calculate the value of r where r = R / k and R is in decimal value; (ii) find the value of n where n = kN; (iii) estimate the value of k where k = number of repayment per year; (iv) calculate the value of PV based on the formula of discounted present value. (b) Calculate the monthly repayment of the loan, MR based on the following formula : pv = PV x MR. (c) Find the percentage of salary remains after paying the loan every month.
- 1 Answers
- 1463 Views
- I also Faced
- E-Mail Answers
Answer Posted / kangchuentat
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.19 : Value of k has to be found first : 12 months / year, then k = 12. (a) (i) r = R / k = 0.0807 / 12 = 0.006725. (ii) n = kN = 12 x 30 = 360. (iii) k = 12. (iv) PV = [ 1 - 1 / (1 + r) ^ n ] / r = [ 1 - 1 / (1 + 0.006725) ^ 360 ] / 0.006725 = 135.382. (b) MR = pv / PV = $450000 / 135.382 = $3323.928. (c) Annual repayment = MR x k = $3323.928 x 12 = $39887.136. Percentage of salary remains after paying loan = 100 [ 1 - (annual repayment) / (annual salary after tax) ] = 100 (1 - 39887.136 / 56000) = 28.773 %. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
how does the properties of an element changes by increasing protons and electrons?
i want sample inteview question of chemical engg for BARC
Explain the reasons of removal of particles from effluent gas?
Explain what are some good uses of low-grade steam at 12 atm and 1920c?
I will complete chemical engg next yr from a deemed university. Earlier I dropped 2 yrs after std 12th. Then I got 2 yr back while completing engg, due to reasons beyond my control. Will I face any problem while applying for job. More so not many core companies come to our collg for placement. So i want to know which all companies can I apply to get a job?
What types of metals are typically removed via chemical precipitation?
how much maximum power can be generated by 320v, 10kg-cm synchronus motor if shaft is roteted mechanically at 50 to 60 rpm?
Explain how does a tank-blanketing valve operate?
Explain how instrument air is continually supplied in process plant?
Hallow everybody, we want to know in a NPk fertilizer process plant (Bulk Blender) we are in doubt if use square or rectangular hopper jus to avoid the vault effect durin the flow of of raw material like Phosphorus, Potasium and zeolite..Please any advise will be appresated Isdray
What is a quick way to calculate frictional pressure drops in carbon steel pipe?
Hi. I have completed my masters in chemical engineering from M S University in year 2008 and now going to do MS Chemical engineering in Lamar University. I am planning to appear for interview in two weeks from now. What are the expected questions from VO regarding masters after masters ? and wat should i expect to give reply ? kindly give your suggestions. Thanks
What is the basic difference between dispersion & distribution in any polymer blend or alloy??
Explain the different ways in which solids can be blended?
What are the different types of equipments for the conveyance of solids?
