Problem No 2 A loan of P200,000 was to be paid monthly for 1 year at an interest rate of 18 % compounded continuously, the first payment to be made at the end of 4th month and decreasing this amount by 5% every month thereafter. What is the amount of each payment? Construct the amortization schedule. Answer the following questions as a guide to analyze the problem 1. Draw the cash flow diagram. What type of cash flow was described in the problem? 2. What nominal rate of interest is required to be used with respect to your cash flow diagram drawn? How can you determine this nominal rate of interest? 3. What is the working formula to calculate the amount of the first payment and the rest of the monthly payments? Check for the consistency of the units. 4. Construct the amortization schedule based on your answers on number #3.

Problem No 2 A loan of P200,000 was to be paid monthly for 1 year at an interest rate of 18 % compounded continuously, the first payment to be made at the end of 4th month and decreasing this amount by 5% every month thereafter. What is the amount of each payment? Construct the amortization schedule. Answer the following questions as a guide to analyze the problem 1. Draw the cash flow diagram. What type of cash flow was described in the problem? 2. What nominal rate of interest is required to be used with respect to your cash flow diagram drawn? How can you determine this nominal rate of interest? 3. What is the working formula to calculate the amount of the first payment and the rest of the monthly payments? Check for the consistency of the units. 4. Construct the amortization schedule based on your answers on number #3.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

p (a) MC ATC MR P* (b) MC ATC MR (c) MC ATC MR
None
Subject : Engineering Economics Please write handwritten Answer And Explain Briefly
Process A has fixed costs of $10,000 and unit costs of $4.50 each, and Process B has fixed costs of $25,000 and unit costs of $1.50 each. At what level of annual production would the two processes have the same cost? (a) 50 units (b) 500 units (c) 5000 units (d) 50,000 units?
Subject: Engineering Economics Topic: Uniform Gradient How much must be deposited in an account in order to have 30 annual withdrawals, with the size of the withdrawal increasing by 3% and the account paying 5%? The first withdrawal is to be $40,000?
Method of full coating is taking into account a. Only direct costs and respective contribution margin b. All costs including fixed and variable costs c. Only direct costs and respective gross margin d. Total sum of fixed costs,but only a paid amount of variable cos
I need to solve this question in Engineering economics
SUBJECT: Engineering Economics Number 3
Given the following information for an insurance company that writes 24-month term policies: Number of Vehicles 50 100 Policy Group A B Effective Date January 1, 2010 Expiration Date December 31, 2011 July 1, 2010 June 30, 2012 All policies within each group have the same effective date. (a) Calculate the earned car-years for calendar year 2011. (b) Calculate the earned car-years for policy year 2010 evaluated as of December 31, 2010 and as of December 31, 2011. (c) Assume Policy Group B cancels on January 1, 2011. Calculate the 2010 policy year written car- years evaluated as of December 31, 2010 and as of December 31, 2011 for Policy Group B. (d) Assume Policy Group B cancels on July 1, 2011. Calculate the 2010 and 2011 calendar year written car-years for Policy Group B.
Subject: Engineering Economics Topic: Uniform Gradient An employee deposits $300 into an account paying 6% per year and increases the deposits by $100 per year for 4 more years. How much is in the account immediately after the 5th deposit?
the impact of NEMA and IEC to malaysia industries and society All explanations given must be provided with detailed references/figures/charts/infographics.
Subject: Engineering Economics A person is just 30 years old. He plans to invest an equal sum of Rs. 20,000 every year for the next 30 years from the end of next year. The bank gives 10% interest compounded annually. Find the maturity value of his account when he is 60 years old.