Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 3, Problem 11P
To determine
Calculate the interest rate.
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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.
A recent government study reported that a college degree is worth an extra $23,000 per year in income (A) compared to what a high-school graduate makes. If the interest rate (i) is 6% per year and you work for 40 years (N), what is the future compound amount (F) of this extra income?
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: (a) P = 1000(P∕A,5%,21)(F∕P,5%,1) (b) P = 1000 (P∕A,5%,20) (c) P = 1000 (P∕A,5%,21) (d) P = 1000 + 1000(P∕A,10.25%,10)
Chapter 3 Solutions
Basics Of Engineering Economy
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Convert an interest rate of 1.5% per month into a...Ch. 3 - Prob. 7PCh. 3 - Prob. 8PCh. 3 - Prob. 9PCh. 3 - Prob. 10P
Ch. 3 - Prob. 11PCh. 3 - Prob. 12PCh. 3 - Prob. 13PCh. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Prob. 16PCh. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Prob. 21PCh. 3 - Prob. 22PCh. 3 - Prob. 23PCh. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - Prob. 29PCh. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - Prob. 35PCh. 3 - Prob. 36PCh. 3 - Prob. 37PCh. 3 - Prob. 38PCh. 3 - Prob. 39PCh. 3 - Prob. 40PCh. 3 - Prob. 41PCh. 3 - Prob. 42PCh. 3 - Erbitux is a colorectal cancer treatment drug that...Ch. 3 - Prob. 44PCh. 3 - Prob. 45PCh. 3 - Prob. 46PCh. 3 - Prob. 47PCh. 3 - Prob. 48PCh. 3 - Prob. 49PCh. 3 - Prob. 50PCh. 3 - Prob. 51PCh. 3 - Prob. 52PCh. 3 - Prob. 53PCh. 3 - Prob. 54PCh. 3 - Prob. 55PCh. 3 - Prob. 56PCh. 3 - Prob. 57PCh. 3 - Prob. 58PCh. 3 - The initial cost of a pulverized coal cyclone...Ch. 3 - Prob. 60PCh. 3 - Prob. 61PCh. 3 - Prob. 62PCh. 3 - Prob. 63PCh. 3 - Prob. 64PCh. 3 - Prob. 65PCh. 3 - Prob. 66PCh. 3 - Prob. 67PCh. 3 - Prob. 68APQCh. 3 - Prob. 69APQCh. 3 - Prob. 70APQCh. 3 - Prob. 71APQCh. 3 - Prob. 72APQCh. 3 - Prob. 73APQCh. 3 - Prob. 74APQCh. 3 - Prob. 75APQCh. 3 - Prob. 76APQ
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- 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_forwardYou place $100 per month into an account that earns 1% per month. Which of the following expressions can be used to calculate the account’s value after 3 years? (a) P = 100(P/A, 1%, 3) (b) F = 100(P/A, 1%, 36)(F/P, 1%, 36) (c) F = 100[(1 + 0.01) n − 1]/0.01 (d) F = 100(F/A, 12.68%, 3)arrow_forwardDon't give answer in image formatarrow_forward
- Bid 1: 9% per year, compounded quarterly Bid 2: 3% per quarter, compounded quarterly Bid 3: 8.8% per year, compounded monthly (a) Determine the effective rate for each bid on the basis of semiannual periods. (b) What are the effective annual rates? These are to be a part of the final bid selection. (c) Which bid has the lowest effective annual rate?arrow_forwardA commercial real estate developer plans to borrow money to finance an upscale mall in an exclusive area of the city. The developer plans to get a loan that will be repaid with uniform payments of $425,000 beginning in year 2 and ending in year 16. How much will a bank be willing to loan at an interest rate of 6% per year? The bank will be willing to loan the developer a sum of $|arrow_forwardIf you make quarterly deposits for 3 years (beginning one quarter from now) into an account that compounds interest at 1% per month, the value of n in the F∕A factor (for determining F at the end of the 3-year period) is: (a) 3 (b) 4 (c) 12 (d ) 16arrow_forward
- You plan to deposit $100 per week into a fund that pays interest of 6% per year, compounded quarterly. Identify the interest period, compounding period, and number of times interest is com-pounded per interest period. Additionally, include the cash flow diagram. Could I please get help with question without the use of excel.arrow_forwardA certain sum of money will be deposited in a savings account that pays interest at the rate of 6% per year, compounded annually. If all of the money is allowed to accumulate, how much must be deposited initially so that $5,000 will have accumulated after 10 yearsarrow_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
- An interest rate of 18% per year, compounded continuously, is closest to an effective: (a) 1.51% per quarter (b) 4.5% per quarter (c) 4.6% per quarter (d) 9% per 6 monthsarrow_forwardA savvy investor paid $5,500 for a 20-year $10,000 mortgage bond that had a bond interest rate of 8% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $11,500 three years after he bought it, what rate of return did the investor make per quarter and per year (nominal)? The rate of return per quarter is%. The rate of return per year is%.arrow_forwardWhat is the true effective annual rate of a credit card plan that charges 1.5% per month on an unpaid balance?arrow_forward
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