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7. Suppose that you are planning to take a four-year loan of $200,000 for your program....

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7. Suppose that you are planning to take a four-year loan of$200,000 for your program. The interest rate of this loan is 7% andits compounds annually. What would be the amount of interest?

8. Assume that a $50,000 investment is held for five years in asavings account with 5% simple interest paid annually. What is thefuture value of such investment?

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Q7
Time Opening Balance Interest Closing Balance
                                                              1.00             200,000.00       14,000.00               214,000.00
                                                              2.00             214,000.00       14,980.00               228,980.00
                                                              3.00             228,980.00       16,028.60               245,008.60
                                                              4.00             245,008.60       17,150.60               262,159.20
Total Amount of interest over 4 years       62,159.20
Q8
Amount of investment                50,000.00
Simple Interest 5%
Amount of interest per year                  2,500.00
Interest for 5 years = 2500*5                12,500.00
Future Value of investment = 50,000 + 12,500                62,500.00

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7. Suppose that you are planning to take a four-year loan of$200,000 for your program. The interest rate of this loan is 7% andits compounds annually. What would be the amount of interest?8. Assume that a $50,000 investment is held for five years in asavings account with 5% simple interest paid annually. What is thefuture value of such investment?

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