The salvage value of loader is $25,000 at the end of it’s 20 yr useful life. The bank offers a 20-yr loan at an 3% interest rate of compounded annually. If you collect only one salvage payment at the end of the life period, collecting salvage sales amount,
a) What is the total amount (P/F) that will be received in present value dollars?
b) What is the number of time periods (n) ,rate of interest (i), per period of time, should be used in solving this problem?
c) Is the future single amount of money (F) known? (Yes, No)
d) Which time value factor should be used to solve this problem?