Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 42P
a.
To determine
The loan amount with more interest rate.
b.
To determine
The difference in interest paid between the two loans.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Q1: A sum of $2000 borrowed at 16% compounded daily for 2 years,
state
(a) The nominal rate of interest (G);
(b) The number of compounding periods per year (m);
(c) The periodic rate of interest (i);
The only time you change the original cash flow diagram in problems involving uniform series cash flows is when the: (a) payment period is longer than the compounding period (b) payment period is equal to the compounding period (c) payment period is shorter than the compounding period (d) stated interest rate is a nominal interest rate
An account has a nominal interest rate of 12% (annually) and an effective interest rate of approximately 12.75% (also annually). The compounding period is most likely which of the following: a) monthly b) yearly c) continuous d) daily
Chapter 1 Solutions
Basics Of Engineering Economy
Ch. 1 - Prob. 1PCh. 1 - Which of the following would be considered...Ch. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8PCh. 1 - Prob. 9PCh. 1 - What is meant by the term time value of money?
Ch. 1 - Prob. 11PCh. 1 - Of the fundamental dimensions length, mass, time,...Ch. 1 - Prob. 13PCh. 1 - When an interest rate statement does not include a...Ch. 1 - Prob. 15PCh. 1 - Prob. 16PCh. 1 - Prob. 17PCh. 1 - Prob. 18PCh. 1 - Prob. 19PCh. 1 - Prob. 20PCh. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - Prob. 23PCh. 1 - Prob. 24PCh. 1 - Prob. 25PCh. 1 - Prob. 26PCh. 1 - Prob. 27PCh. 1 - Prob. 28PCh. 1 - How many years does it take for an investment of...Ch. 1 - Prob. 30PCh. 1 - Prob. 31PCh. 1 - Prob. 32PCh. 1 - Prob. 33PCh. 1 - Prob. 34PCh. 1 - Prob. 35PCh. 1 - Prob. 36PCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Prob. 39PCh. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - Prob. 44PCh. 1 - At 9% per year simple interest, 1000 is equivalent...Ch. 1 - Prob. 46PCh. 1 - Prob. 47PCh. 1 - Prob. 48PCh. 1 - Prob. 49PCh. 1 - Prob. 50PCh. 1 - Prob. 51PCh. 1 - Prob. 52PCh. 1 - Prob. 53PCh. 1 - Prob. 54PCh. 1 - Prob. 55PCh. 1 - Prob. 56PCh. 1 - Prob. 57PCh. 1 - Prob. 58PCh. 1 - Prob. 59PCh. 1 - Prob. 60PCh. 1 - Prob. 61PCh. 1 - Prob. 62PCh. 1 - Prob. 63PCh. 1 - Prob. 64PCh. 1 - Prob. 65PCh. 1 - Prob. 66PCh. 1 - Prob. 67PCh. 1 - Prob. 69APQCh. 1 - Prob. 70APQCh. 1 - Prob. 71APQCh. 1 - Prob. 72APQCh. 1 - An investment of 8,000 nine years ago has...Ch. 1 - Prob. 74APQCh. 1 - Prob. 75APQCh. 1 - Prob. 76APQCh. 1 - Prob. 77APQ
Knowledge Booster
Similar questions
- Identify the payment period and compounding period for the following situations:a. Deposits are made each quarter into an account reserved for purchasing new equipment two years from now. The interest rate on the deposits is 12% per year compounded monthly.b. The Williams family takes a $10,000 withdrawal from a second retirement package each 6 months to pay property and income taxes. The funds are invested in a fixed return annuity that pays 7% per year.arrow_forwardE.Z. Money, who owns a chain of nightclubs, needs to borrow $20,000 to remodel the local dive. Ima Shark offers to loan the $20,000 to Money for 24 months. Money must make monthly payments of $1118. Determine the loan’s (a) monthly interest rate and (b) effective annual interest rate. Use interpolation method.arrow_forwardIf money is worth 8% compounded quarterly, calculate the present worth of the following: (a) An annuity of P1,000 payable quarterly for 50 years (b) An annuity of P1,000 payable quarterly for 100 years (c) A perpuity of P1,000 payable quarterlyarrow_forward
- A problem on the midterm exam asked you to calculate the monthly payment on a $15,000 car loan at an interest rate of 9% compounded monthly to be repaid over 60 months, where 9% is the nominal annual interest rate. Some students incorrectly used 9% as the monthly interest rate. A monthly interest rate of 9% is equivalent to what effective annual interest rate? (a) Effective annual interest rate = 9% (b) Effective annual interest rate = 9% per month x 12 months per year = 108% (c) Effective annual interest rate = 9% per month ÷ 12 months per year 0.75% (d) Effective annual interest rate = (1+ effective monthly rate)12 – 1 = (1.09)12 – 1 = 181%arrow_forwardUsing linear interpolation, determine the value of (a) (F/A, 11%, 15) and (b) (F/P, 16%, 25) from the compound interest tables. Compute this same value using the equation or a 5-BUTTON SOLUTION. Why do the values differ?arrow_forwardEXAMPLE 1.4 / HP borrowed money to do rapid prototyping for a new ruggedized computer that targets desert oilfield conditions. The loan is $1 million for 3 years at 5% per year simple interest. How much money will HP repay at the end of 3 years? Tabulate the results in $1000 units. EXAMPLE 1.5 / If HP borrows $1,000,000 from a different source at 5% per year compound interest, compute the total amount due after 3 years. Compare the results of this and the previous example. Comment : The difference between simple and compound interest grows signif- icantly each year. If the computations are continued for more years, for exam- ple, 10 years, the difference is $128.894; after 20 years compound interest is $653.298 more than simple interest.arrow_forward
- A credit card issued by the GECU credit union has an APR of 16% and an APY of 16.64%. (a) What is the compounding period? (b) Use the EFFECT function to find the compounding period.arrow_forwardA person is planning to open a retirement account. He plans is to deposit $1,000 per month for next 45 years. This person visits four local banks and recorded the interest rates: Bank A) 0.08% per month compounded monthly Bank B) 6.2% per year compounded continuously Bank C) 8% per year compounded monthly Bank D) 7% per year compounded semi-annually Determine 1) Which bank should be selected? 2) How much money will be accumulated in 45 years in the selected bank?arrow_forwarddon't use excel only formula used. For an interest rate of 8% per year compounded quarterly, determine the number of times interest would be compounded (a) per 2 years, (b) per half year, and (c) per quarter.arrow_forward
- The present worth of a deposit of $1000 now and $1000 every 6 months for 10 years at an interest rate of 10% per year, compounded semiannually is represented by which of the following equations: Select one: a. P = 1000 + 1000(P/A,10.25%,10) b. P = 1000 (P/A,5%,21) c. P = 1000(P/A,5%,21)(F/P,5%,1) %3D d. P = 1000 (P/A,5%,20)arrow_forwardHow much would your parents have to deposit each month into an account that grows at a rate of 10% per year compounded annually if they want to have $90,000 at the end of year 3 to cover part of your college expenses? Assume no interperiod compounding. Parents have to deposit $ each month.arrow_forwardWhat is the effective annual interest rate for 10% compounded (a) semi- annually, (b) every four months, (c) quarterly, (d) every other month, (e) monthly?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education