1. Equipment is purchased for $12,000, and is expected to be sold after 10 years for $2,000. Estimated maintenance is $1000 the first year, and maintenance costs are expected to increase by $200 each year thereafter. Using a 4% interest rate, find the present worth of the project.
2. A $45,000 direct reduction loan is financed at 9.25% per annum. The monthly payment is $385. What is the total number of monthly payments to pay off the loan? What are the amounts paid toward interest and principal in the 14th period? What is the remaining principal balance after the 14th payment has been made?