Suppose a company did $2,000,000 in annual maintenance in 2007 and expects 90% of those to renew for 2008. suppose that product sales for 2007 were $2,000,000 (which included a free year of maintenance) and 70% of those were expected to pay an annual maintenance of 15% of the purchase price in 2008. what will be the annual maintenance collected in 2008?

The annual maintenance collected in 2008 is $201,000

Explanation:

The computation of the annual maintenance collection is shown below:

For the year 2007

= Annual maintenance × renew percentage

= $2,000,000 × 90%

= $180,000

For the year 2018

= Product sales × paying percentage × purchase percentage

= $2,000,000 × 70% × 15%

= $21,000

So, the annual maintenance collected equals to

= 2017 annual maintenance + 2018 annual maintenance

= $180,000 + $21,000

= $201,000

I would need to pay Interest of $3150.44 in year 2

Explanation:

First Calculate annual Payment

The Principle is $ 47400, Therefore PV =$47400

Interest rate provided is 7.5% , Therefore i = 7.5%

Interest is compounded Annually, Therefore P/YR = 1

Period over which loan is to be repaid is 7 years, Therefore N = 7

Payments are made at the end of year

Using Financial Calculator for (PV =$47400, i = 7.5%, P/YR = 1,N = 7) The payment to be made annually is $8949.13

Then Determine Interest to be paid in Year 2 from Amortization Schedule

Principle payment of $5394.13 is made

And Interest paid $ 3555 is paid

Leaving the Balance to be paid at $ 42005.87

Principle payment is $ 7440.57

Interest interest paid is $ 3150.44

Leaving a remaining balance of $36207.17 to be paid