Cash Flow& Annuity 1. A certain annuity pays P(80+N) at the end of every 3 months. If the present value of the annuity isP1,200 and the accumulated amount is P2,000, determine the nominal rate.2. The average annual cost of damages caused by floods to a certain subdivision located along the PasigRiver is estimated at P700,000. To build a gravity dam to protect the area from floods would costP2,500,000 and would involve an annual maintenance cost of P(20,000+36N). With interest at 8%compounded annually, how many years will it take for the dam to pay for itself?3. A certain manufacturing plant is being sold and was submitted for bidding. Two bids were submittedby interested buyers. The first bid offered to pay P200,000 each year for 5 years, each payment beingmade at the beginning of each year. The second bidder offered to pay P120,000 the first year, P180,000the second year, and P270,000 each year for the next3 years, all payments being made at the beginningof each year. If money is worth (12+N/10)% compounded annually, which bid should the owner ofthe plant accept?4. Morris want to start saving for his ten-year old son's college education. If he is guaranteed 6% interestcompounded quarterly, how much he would have to save each month to amount to P(12,000+50N) bythe time his son is 18 years old?5. Many persons prepare for retirement by making monthly contributions to a savings program. Supposethat $2,000 is set aside each year and invested in a savings account that pays (10+N/5)% interest peryear, compounded continuously. Determine the accumulated savings in this account at the end of 30years.

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Answered: 1. A certain annuity pays P(80+N) at…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. Marion would like to purchase a used car, which requires a down payment of 80,000.00 pesos. He is willing to pay a monthly amortization equal to 25% of his monthly salary. if the seller will agree to a down payment and the balance payable in 3 years at 16% per year payable in monthly basis, how much is the cash value of the car if the first payment will be due at the end of the first month? Mario is receiving a monthly salary of 16,000.00 pesos a month. Show the cashflow diagram.
1. You have just been elected into the “Society of HonorableEngineers.” First-year dues are waived in honor of your election.Thus, your first-payment of $200 is due at the end of the year, andannual dues are expected to increase 3% annually. After 40 years of paying dues you become a life member and pay no more dues.Instead of paying annual dues, however, you can pay a one-time$2000 life membership fee. (a) Show the equation for determining the rate of return for buying alife membership. (b) What is the rate of return?
7. Sarah borrows some money to buy a new car. The car dealership allows her to defer payments for 12 months, and Sarah makes 60 end of month payments thereafter. If the original loan is $15321 and interest is 0.75% per month, how much will Sarah's monthly payment be? • $697 $627 $349 $279 $418
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Q1): A company is planning to expand its business after 5 years from now. The expected The company required money can invest $ 500,000 at the end of every year for the next for the expansion programmed 2$ 5,000,000. five years. If the assured rate of of investment is 18% for the return check whether the accumulated in the would be company, sufficient to meet the fund for the expansion programmed. sum асcount If not, find the difference in amounts for which the company should make some other arrangement after 5 years.
allie has won a lottery that pays her $135,000 at the end of this year and increases by 11.25% per year thereafter for 26 years. leon has offered allie $ 2,500,000 today in exchange for all the money she will receive. if gail can get 13% per year compounded every 6 months. a. determine the present worth of the lottery winnings. b. does leon offer a good deal? (yes/no) c. what is the future worth of the better deal?
1
Find the value of money (K) which can be withdrawn at the end of the 6th, 8th and 10th years, in order the value of the cash flow diagram shown below to be zero at the end of the 10th year. Find the value of (K) without trial-and-error method? The annual nominal interest rate is 12%. A1 = 400 A2 = 650 G = 45 61/27 71/2 81/2 9 91/2 A₁+7G A₂+6G A₁+5G A₂+4G A₂+3G A₁+2G 2 21/2 3 31/24 41/2 5 51/2 K A₂+G 1 11/2 K K
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2

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