Explain in a few sentences how discounting works. Illustrate how it works using an interest rate of 7% (nominal yearly, compounded yearly), and a purchase of $2000 that can be be made today, or in 4 years. Enter your explanation and answer below, don't enter anything in the dropbox submission for this question.
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- Econo Cool air conditioners cost $380 to purchase, result in electricity bills of $166 per year, and last for 5 years. Luxury Air models cost $580, result in electricity bills of $132 per year, and last for 8 years. The discount rate is 20% a. What is the equivalent annual cost of the Econo-Cool model? Note: Do not round intermediate calculations. Round your answer to 2 decimal places..Please show how to solve this in Excel using Excel formulas and please show the spreadsheet so I can understand better. Suppose Tommy borrows $500,000 at 4% for 15 years and monthly payments. The annual percentage rate (APR) on the loan is 4.5%. What amount of discount points was charged if there was $4,500 origination cost?A store offers two payment plans. Under the installment plan, you pay 25% down and 25% of the purchase price in each of the next 3 years. If you pay the entire bill immediately, you can take a 10% discount from the purchase price. Assume the product sells for $100. a-1. Calculate the present value of the payments if you can borrow or lend funds at an interest rate of 5 percent. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2 Which is a better deal? b-1. Calculate the present value if the payments on the 4-year installment plan do not start for a full year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Which is a better deal?
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