Please provide full working out You are working on a dam project, and your salar

Question

Please provide full working out

You are working on a dam project, and your salary leaves you $950 surplus each month which you deposit in your bank at a compound interst rate of 5.5% per annum. How much will the account be worth after 3 years?

The contractor working on the dam site has taken out a loan of $300,000 in order to buy a scraper. The bank is lending him the money to be repaid over 8 years at a fixed interest rate of 6.5%. The contractor will be making monthly repayments to the bank and the interest on the loan will be compounded monthly. How much will he have to pay each month to clear his debt after 8 years ?

The completed dam will generate water sales and tourism income of $200,000 per year. The life of the dam is estimated at 30 years. If the projected average interest rate over this 30 years is 5.0%, calculate the present value of this income stream.

Explanation / Answer

After 3 years account balance=$37091.16 by taking rmonthly=5.5/12 and taking in 36 cash flows for 3 years of $950
We have to pay=$4015.8697 each month for 96 cash flows as mortgage payment on rate=6.5/12.
Present value=$3074490.205

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