Silver Sun Health just bought a new bowling alley. To pay for the bowling alley,

Question

Silver Sun Health just bought a new bowling alley. To pay for the bowling alley, the company took out a loan that requires Silver Sun Health to pay the bank a special payment of 9,830 dollars in 7 month(s) and also pay the bank regular payments of 5,250 dollars each month forever. The interest rate on the loan is 1.34 percent per month and the first monthly payment of 5,250 dollars will be paid in 1 month. What was the price of the bowling alley?

Goran has an investment worth 302,689 dollars. The investment will make a special payment of X dollars to Goran in 2 month(s) and the investment also will make regular, fixed monthly payments of 2,130 dollars to Goran forever. The expected return for the investment is 0.73 percent per month and the first regular, fixed monthly payment of 2,130 dollars will be made to Goran in 1 month. What is X, the amount of the special payment that will be made to Goran in 2 month(s)?

Explanation / Answer

1.
Price pf bowling alley=9830/1.0134^7+5250/1.34%=400746.4907
2.
AMount of special payment to be made in 2 months=(302689-2130/0.73%)*(1+0.73%)^2=11068.01878

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