Answer:
Bad Company
The number of years that it will take for the company to have the money saved for the renovation is:
= 3.2 years (12.793/4).
Explanation:
a) Data and Calculations:
The outlay required for the renovation of the manufacturing facility = $2.05 million
Quarterly deposit into an account = $155,000
The interest earned per quarter on the deposit = 2.05% per quarter
From an online financial calculator, it will take 3.2 years:
I/Y (Interest per year) 2.25
PV (Present Value) 2050000
PMT (Periodic Payment) = $
155000
FV (Future Value) 0
Results
N = 12.793
Sum of all periodic payments = $1,982,883.80
Total Interest = $67,116.20
