Solve the following problems: 1. The offshore design group at Bechtel just purchased upgraded CAD software for $5000 now and annual payments of $500 per year for 6 years starting 3 years from now for annual up-grades. What is the present worth in year 0 of the payments if the interest rate is 8% per year? PT=$?? 1 N i=8% per year 3 4 5 6 7 8

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Solve the following problems:
1. The offshore design group at Bechtel just purchased upgraded CAD software for $5000
now and annual payments of $500 per year for 6 years starting 3 years from now for
annual up-grades. What is the present worth in year 0 of the payments if the interest
rate is 8% per year?
PT=$??
0
O
Po=$5000
1
A'=$?
2
2
i-8% per year
3
4 5
2. Recalibration of sensitive measuring devices costs $8000 per year. If the machine will be
recalibrated for each of 6 years starting 3 years after purchase, calculate the 8-year
equivalent uniform series at 16% per year (A¹).
A=$500
i=16% per year
3
4
5
6
6
A=$8000
7 8
-Years
7 8
-Years
Transcribed Image Text:Solve the following problems: 1. The offshore design group at Bechtel just purchased upgraded CAD software for $5000 now and annual payments of $500 per year for 6 years starting 3 years from now for annual up-grades. What is the present worth in year 0 of the payments if the interest rate is 8% per year? PT=$?? 0 O Po=$5000 1 A'=$? 2 2 i-8% per year 3 4 5 2. Recalibration of sensitive measuring devices costs $8000 per year. If the machine will be recalibrated for each of 6 years starting 3 years after purchase, calculate the 8-year equivalent uniform series at 16% per year (A¹). A=$500 i=16% per year 3 4 5 6 6 A=$8000 7 8 -Years 7 8 -Years
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