3. In order to restructure some of its debt, General Motors decided to pay off oneof its short-term loans. If the company borrowed the money 1 year ago at aninterest rate of 8% per year and the total cost of repaying the loan was $82 million,what was the amount of the original loan?4. How many years would it take for an investment of $280,000 to cumulate to atleast $425,000 at 15% per year interest? 5. Valtro Electronic Systems, Inc. set aside a lump sum of money 4 years ago inorder to finance a plan expansion now. If the money was invested in a 10% peryear simple interest certificate of deposit, how much did the company set aside ifthe certificate is now worth $850,000?6. Two years ago, ASARCO, Inc. invested $580,000 in a certificate of deposit thatpaid simple interest of 9% per year. Now the company plans to invest the totalamount accrued in another certificate that pays 9% per year compound interest.How much will the new certificate be worth 2 years from now?7. How many years would it take for money to triple in value at 20% per yearsimple interest?

Question 3 The total cost of repaying the loan in one year is $82 million Rate of interest for this…

3. In order to restructure some of its debt, General Motors decided to pay off one of its short-term loans. If the company borrowed the money 1 year ago at an interest rate of 8% per year and the total cost of repaying the loan was $82 million, what was the amount of the original loan?

3. In order to restructure some of its debt, General Motors decided to pay off one of its short-term loans. If the company borrowed the money 1 year ago at an interest rate of 8% per year and the total cost of repaying the loan was $82 million, what was the amount of the original loan?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. In order to restructure some of its debt, General Motors decided to pay off one
of its short-term loans. If the company borrowed the money 1 year ago at an
interest rate of 8% per year and the total cost of repaying the loan was $82 million,
what was the amount of the original loan?
4. How many years would it take for an investment of $280,000 to cumulate to at
least $425,000 at 15% per year interest?

5. Valtro Electronic Systems, Inc. set aside a lump sum of money 4 years ago in
order to finance a plan expansion now. If the money was invested in a 10% per
year simple interest certificate of deposit, how much did the company set aside if
the certificate is now worth $850,000?
6. Two years ago, ASARCO, Inc. invested $580,000 in a certificate of deposit that
paid simple interest of 9% per year. Now the company plans to invest the total
amount accrued in another certificate that pays 9% per year compound interest.
How much will the new certificate be worth 2 years from now?
7. How many years would it take for money to triple in value at 20% per year
simple interest?

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