Return on Software: Maximizing the Return on Your Software Investment

Chapter 5 Self-Study Questions

1.	Depends on the situation. Assuming that the savings account interest rate is 6% and the loan interest rate is 10%, the company borrowing $10,000 would pay $1000 in interest to the financial institution, whereas the financial institution would pay $600 in interest to the depositor. The financial institution would net $1000 – $600 = $400.
2.	I = $2500 * 7 years * 0.09 = $1575, F = P + I = $2500 + $1575 = $4075
3.	3a. 3b. Single-payment compound-amount 3c. F = $2500 (F/P,9%,7) = $2500 * 1.8280 = $4570 3d. It's $495 more than the simple interest amount because of the effect of the compounding of interest owed in the earlier ...