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1. How long will it take for an investment to triple at 10% per year (a) simple interest and (b) compound interest?

1. How long will it take for an investment to triple at 10% per year (a) simple interest and (b) compound interest?

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. How long will it take for an investment to triple at 10% per year (a) simple interest and (b) compound interest? 2. What is the present worth of a future cost of S180000 to a company 12 years from now at a compound interest rate of 12% per year? 3. What is the future worth of a uniform, end of period, annual series of $8000 for 12 years at an interest rate of 8% per year? 4. Calculate the present worth of an expenditure of $7500 per year for 12 years that will start 4 years from now if the interest rate is 12% per year? 5. The company is planning to borrow now $85000 at 18% per year. The company expects to repay the loan with eight equal annual payments at the end of each year, beginning I year after the loan is received. Find the amount of equal annual payments. 6. A person borrows $45000 at an interest rate of 12% per year. It is desired to repay the loan in 12 payments, with the first payment 3 years from now. If the payments are to decrease by $150 each time, determine the size of the fifth payment. 7. Calculate the equal, end-of-period, annual cost of a machine which costs $75000 initially and will have a $17000 salvage value after 11 years. The operating cost is $9000 at the end of yearl and amounts increasing by 8% each year. Use an interest rate of 10% per year. 8. What equal amounts of money will have to be deposited 2, 5 and 8 years from now, if you want to have $50000 in your account 14 years from now? Use an interest rate of 10% per year. 9. What equal uniform annual payment for nine years beginning two years from now would be equivalent to spending $8000 now, $5000 six years from now and $9000 ten years from now if the interest rate is 11% per year? An engineer planning for her retirement will deposit 15% of her salary each year into a stock fund. If her salary this year is $88000(end of year 1) and she expects her salary to increase by 12% each year, what will be the future worth of the fund after 16 years if it earns 10% per year? 10.
Transcribed Image Text:1. How long will it take for an investment to triple at 10% per year (a) simple interest and (b) compound interest? 2. What is the present worth of a future cost of S180000 to a company 12 years from now at a compound interest rate of 12% per year? 3. What is the future worth of a uniform, end of period, annual series of $8000 for 12 years at an interest rate of 8% per year? 4. Calculate the present worth of an expenditure of $7500 per year for 12 years that will start 4 years from now if the interest rate is 12% per year? 5. The company is planning to borrow now $85000 at 18% per year. The company expects to repay the loan with eight equal annual payments at the end of each year, beginning I year after the loan is received. Find the amount of equal annual payments. 6. A person borrows $45000 at an interest rate of 12% per year. It is desired to repay the loan in 12 payments, with the first payment 3 years from now. If the payments are to decrease by $150 each time, determine the size of the fifth payment. 7. Calculate the equal, end-of-period, annual cost of a machine which costs $75000 initially and will have a $17000 salvage value after 11 years. The operating cost is $9000 at the end of yearl and amounts increasing by 8% each year. Use an interest rate of 10% per year. 8. What equal amounts of money will have to be deposited 2, 5 and 8 years from now, if you want to have $50000 in your account 14 years from now? Use an interest rate of 10% per year. 9. What equal uniform annual payment for nine years beginning two years from now would be equivalent to spending $8000 now, $5000 six years from now and $9000 ten years from now if the interest rate is 11% per year? An engineer planning for her retirement will deposit 15% of her salary each year into a stock fund. If her salary this year is $88000(end of year 1) and she expects her salary to increase by 12% each year, what will be the future worth of the fund after 16 years if it earns 10% per year? 10.
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