1. Interest Is Needed to Evaluate Engineering Projects
The engineering group of Baker Designs must decide whether to spend $90K (K for thousands) on a new project. This project will cost $5K per year for operations, and it will increase revenues by $20K annually. Both the costs and the revenues will continue for 10 years. Should the project be done?
2. Interest on a Savings Deposit
If $100 is deposited in a savings account, how much is in the account at the end of each year for 20 years if the interest is deposited? The account earns 5% interest compounded annually.