Contemporary Engineering Economics 6th Edition Chan Park - Solutions

You are about to borrow $15000 from a bank at an interest rate of 8% compounded annually. You are required to make three equal annual repayments the amount of $5,820.50 per year, with the first repayment occurring at the end of year 1. Show the interest payment and principal payment in each year.
Suppose you have the alternative of receiving either $22,000 at the end of five years or P dollars today. Currently, you have no need for money, so you could deposit the P dollars in a bank that pays 5% interest. What value of P would make you in different in your choice between P dollars today and
Suppose that you are obtaining a personal loan from your uncle in the amount of $30.000 (now) to be repaid in three years to cover some of your college expenses. If your uncle usually earns 9% interest (annually) on his money, which is invested in various sources, what minimum lump-sum payment
If you deposited $100 now (n = 0) and $200 two years from now (n = 2) in a savings account that pays 10% annual interest, how much would you have at the end of year 10?
The average price of a new home is $250,000. If new home prices are increasing at a rate of 6% per year, how much will a new home cost in 10 years?
What will be the amount accumulated by each of these present investments?(a) $5,000 in 5 years at 7% compounded annually.(b) $7,250 in 15 years at 9% compounded annually.(c) $9,000 in 33 years at 6% compounded annually.(d) $12,000 in 8 years at 5.5% compounded annually.
You are interested in buying a piece of real property that could be worth $300,000 in 10 years. Assuming that your money is worth 8%, how much would you be willing to pay for the property?
For an interest rate of 13% compounded annually. determine the following.(a) How much can be lent now if $12,000 will be repaid at the end of four years?(b) How much will be required in five years to repay a $30,000 loan received now?
How many years will it take an investment to triple if the interest rate is 8% compounded annually?
On October 1, 1970. Walmart first offered 300,000 shares of its common stock to the public at a price of$16.50 per share. Since that time. Walmart has had 11 two-for-one stock splits. So if you purchased 100 shares in 1970. you would have 204,800 shares as of September 30. 2014. The closing price
If you desire to withdraw the amounts given in Table P3.19 over the next five years from a savings account that earns 7% interest compounded annually. how much do you need to deposit now? TABLE P3.19 N 2 3 4 5 Amount $15,000 23,000 36,000 48,000
If $2,000 is invested now, $2,500 two years from now, and $3000 four years from now at an interest rate of 6 compounded annually, what will be the total amount in 10 years?
How much invested now at 8% would be just sufficient to provide three payments. with the first payment in the amount of $9,000 occurring two years hence, then $6,000 five years hence, and finally $3,000 seven years hence?
What is the future worth of a series of equal year-end deposits of $3,000 for 15 years in a savings account that earns 9% annual interest if the following were true?(a) All deposits are made at the end of each year?(b) All deposits are made at the beginning of each year?
You are paying into a mutual fund that earns 6% compound interest. If you are making an annual contribution of $10,000, how much will be in the funds in 20 years?
What equal annual series of payments must be paid into a sinking fund to accumulate the following amounts?(a) $45,000 in 11 years at 8% compounded annually.(b) $35,000 in 18 years at 6% compounded annually.(C) $25,000 in 6 years at 7% compounded annually.(d) $12,000 in 13 years at 11% compounded
You want to save money from your business operation to replace a truck that has been used in delivery. The truck will be replaced after 10 years from now and the replacement cost would be about $50,000. If you earn 6% interest on your savings, how much must you deposit at the end of each year to
Part of the income that a machine generates is put into a sinking fund to replace the machine when it wears out. If $3,000 is deposited annually at 6% interest. how many years must the machine be kept before a new machine costing $55,000 can be purchased?
A no-load (commission-free) mutual fund has grown at a rate of 11% compounded annually since its beginning, if it is anticipated that It will continue to grow at that rate, how much must be invested every year so that $15,000 will be accumulated at the end of five years?
To help you reach a $10,000 goal five years from now, your father offers to give you $1,000 now. You plan to get a part-time job and make five additional deposits. one at the end of each year. (The first deposit is made at the end of the first year.) If all your money is deposited in a bank that
What equal annual payment series is required to repay the following present amounts?(a) $l5,000 in six years at 3.5% interest compounded annually.(b) $7,500 in seven years at 7.5% interest compounded annually.(c) $2,500 in five years at 5.25% interest compounded annually.(d) $12,000 in 15 years at
You have borrowed $50,000 at an interest rate of 12%. Equal payments will be made over a three-year period. (The first payment will be made at the end of the first year.) What will the annual payment be, and what will the interest payment be for the second year?
You borrowed $15,000 from a bank with the agreement that you repay the balance in 10 equal annual installments at an interest rate of 9%. What should be the required annual payment size?
What is the present worth of the following series of payments?(a) $1,000 at the end of each year for eight years at 7.2% compounded annually.(b) $4,500 at the end of each year for 12 years at 9.5% compounded annually.(c) $1,900 at the end of each year for 13 years at 8.25% compounded annually.(d)
Recently, Matt Ryan, an NFL quarterback, agreed to a five-year, $103.75 million contract extension with the Atlanta Falcons, which made him one of the highest-paid players in professional football history. The contract consisted of a $30 million signing bonus and average annual salary of $20.75
An individual deposits an annual bonus into a savings account that pays 6% interest compounded annually. The size of the bonus increases by $5,000 each year, and the initial bonus amount was $20,000. Determine how much will be in the account immediately after the fifth deposit.
Five annual deposits in the amounts of $10,000, $8,000, $6,000, $4,000, and $2,000, in that order, are made into a fund that pays interest at a rate of 8% compounded annually. Determine the amount in the fund immediately after the fifth deposit.
What is the equal payment series for 12 years that is equivalent to a payment series of $15,000 at the end of the first year, decreasing by $1,000 each year over 12 years? Interest is 8% compounded annually.
How much do you have to deposit now in your savings account that earns a 6% annual interest if you warn to withdraw the annual payment series in the figure below? 0 I I I P= ? $1,000 $1,250 1 Figure P3.42 2 $1,500 3 $1,750 4 $2,000 5
Anderson Manufacturing Co., a small fabricator of plastics, needs to purchase an extrusion molding machine for $150.000. Anderson will borrow money from a bank at an interest rate of 7% over five years. Anderson expects its product sales to be slow during the first year, hut to increase
Joe’s starting salary as a mechanical engineer is around $80,000. Joe is planning to place a total of 10% of his salary each year in the mutual fund. Joe expects a 5% salary increase each year for the next 30 years of employment. If the mutual fund will average 7% annual return over the course of
What is the amount of 10 equal annual deposits that can provide five annual withdrawals? A first withdrawal of $15,000 is made at the end of year 11 and subsequent withdrawals increase at the rate of 8% per year over the previous year’s withdrawal. Determine the amounts from the following
You have $15,000 available for investment in stock. You are looking for a growth stock whose value can grow to S40,000 over five years. What kind of growth rate are you looking for?
Many oil price forecasts in the early 2000s indicated that the price of oil in the year 2007 would not exceed $50 per barrel. What is the price of oil today? Why are these prices so difficult to predict? Imagine what the consequences would be if you used these optimistic estimates in your economic
Work in small groups and brainstorm ideas about how a common appliance, device, or tool could be redesigned to improve it in some way. Identify the steps involved and the economic factors that you would need to consider prior to making a decision to manufacture the redesigned product. A detailed
Review the contents of The Wall Street Jour-nal for the past three months. Then, identify and cat-egorize the types of investment decisions appearing in the journal according to the types of strategic eco-nomics decisions discussed in the text.

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