Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 3, Problem 4P
To determine
Calculate the interest payment and principle payment.
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You have borrowed $20,000 at an interest rate at 10% compounded annually. Equal payments will be made over a three-year period with each payment made at the end of the corresponding year. What is the amount of the annual payment? What is the interest payment for the second year?
a) What is the future value of a series of payments of $6,000 each, at the end of 8 years, at 6%
compounded annually? First payment occurred at end of year 1.
b) What is the present value of a series of 6 payments of $5,000 each at 7.25%compounded
annually?
c) What equal-annual-payment series is required in order to repay a present value of $18,000 in five
years at 8% interest compounded annually?
What is the future worth of the following series of payments?
a) $30,000 at the end of each six-month period for five years at 8% compounded
semiannually.
b) $50,000 at the end of each quarter for 10 years at 6% compounded quarterly.
c) $13,000 at the end of each month for six years at 9% compounded monthly.
Chapter 3 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 3 - Prob. 1PCh. 3 - Prob. 2PCh. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Prob. 6PCh. 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 - Prob. 43PCh. 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 - Prob. 59PCh. 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. 68PCh. 3 - Prob. 69PCh. 3 - Prob. 70PCh. 3 - Prob. 71PCh. 3 - Prob. 72PCh. 3 - Prob. 1STCh. 3 - Prob. 2STCh. 3 - Prob. 3ST
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- What is the equal payment series for 6 years (the first payment is given at the end of year 1) that is equivalent to a single payment of $20,000 made at the end of the third year. (use i = 10 % compounded quarterly).arrow_forwardthe desired accumulated amount is $70,000 after 14 years invested in an account with 2% interest compounded annuallyarrow_forwardAn individual makes six annual deposits of $2,000 in a savings account that pays interest at a rate of 4% compounded annually. Two years after making the last deposit, the interest rate changes to 7% compounded annually. Ten years after the last deposit the accumulated money is withdrawn from the account. How much is withdrawn?arrow_forward
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- A series of equal quarterly payments of $2,000 for 10 years is equivalent to what future lump-sum amount at the end of 20 years at an interest rate of 6% compounded continuously?arrow_forwardCalculate the future value (F) for the cash flows at the end of each year over a four-year period, using the interest rates indicated in the provided figure. 10% Compounded quarterly 6% Compounded monthly 0 $450 1 2 $150 F=? 3 Year $450arrow_forwardSuppose you want to withdraw $30,000 at the end of year 3 and another $30,000 at the end of year 5. The account’s interest rate is 5% compounded annually. a) how much should you deposit now? b) Suppose you realize you can only deposit $20,000 today, but you expect to have more funds available in 1 year. How much must you deposit into the account at the end of year 1 so that you can still make the necessary withdrawals at the end of year 3 and 5? answer a and barrow_forward
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