b) Explain the calculations 1) to 4). 1) A = R.. 1-(1+r)" r 1-(1+0.00275)-80 2) 9365991= R. 0.00275 -80 3) 25756.475 = R·(1-1.00275* 4) R = 130585.20

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 18E
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A company needs to build a new warehouse in the area at the Danish-German border. The company has been looking at two sites, one on each side of the border.

The site on the Danish side of the border has an area of 4178 m2 at a price of DKK 115 per m2. On the German side, the site is 4025 m2 at a price of EURO 19 per m2.

The company has received one offer for the construction in Denmark and one offer for the construction in Germany. The offer for the construction in Denmark is DKK 9495000. The offer for the construction in Germany is EURO 1495000.

In the problem you can use an exchange rate of 7.45 DKK/EUR or you may use the actual exchange rate of the day.

a) Determine the total price of the site and the construction on the Danish side as well as on the German side of the border.

Write an explanation of 1-2 paragraphs 

In Germany the financing of the total price on the site and the construction can be done in the following way:

  • 80% bank loan

  • 20% own financing

    The bank loan has a duration of 20 years with fixed quarterly payments. The interest rate on the bank loan is 0.275% per quarter.
    Below the quarterly payment has been determined.

  • b) Explain the calculations 1) to 4). 

    *picture* 

     

b)
Explain the calculations 1) to 4).
1)
A = R.
1-(1+r)™
r
9365991= R.–(1+0.00275)-80
0.00275
1.
2)
3)
25756.475 = R·(1–1.00275-8°)
4)
R = 130585.20
%3D
Transcribed Image Text:b) Explain the calculations 1) to 4). 1) A = R. 1-(1+r)™ r 9365991= R.–(1+0.00275)-80 0.00275 1. 2) 3) 25756.475 = R·(1–1.00275-8°) 4) R = 130585.20 %3D
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