4 The construction period of a certain project is 2 years Th

4. The construction period of a certain project is 2 years. The static investment of a project is 20,000,000yuan, the investment of the first year is 60%, the investment of the second year is 40%, the annual price increase is 3%. The loan of the first year is 2,000,000yuan, and the loan of the second years is 3,000,000yuan. If the interest rate is 10%. Please calculate the price hike and the interest of the construction period. 70.

Solution

Assuming that the investment is done at the start of the year along with the loan taken. If we assume that the gross loan in first year is 2000000 and in year 2 is 5000000 (2000000 new loan taken in second year). we assume that interest in first year is paid. following provides the results of the

Hence the price hike is 1.2%ofthe total investment. and total interest for two years of loan is 700000 considering the interest in first year is paid. if the interest in first year is not paid, then total interest is 720000.

		Invesment at constant price	Inflation	Invesment at current price	New Loan	Gross loan	Interest
Year 1	0	12000000	3%	12000000	2000000	2000000	200000
Year 2	1	8000000	3%	8240000	3000000	5000000	500000
Total	20000000		20240000	5000000	7000000	700000