Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 4, Problem 21P
To determine
Calculate the
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Calculate the effective annual interest rate for 15% correspondingto each of the following:(d) compounded monthly(e) compounded weekly(f) compounded daily(g) Compounded continuously
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Determine the present equivalent value of $400 paid over a period of 7 years in each of this situations: (a) The interest rate is 12% compounded annually (b) The interest rate is 12% compounded quarterly (c) The interest rate is 12% compounded continuously
Chapter 4 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10P
Ch. 4 - Prob. 11PCh. 4 - Prob. 12PCh. 4 - Prob. 13PCh. 4 - Prob. 14PCh. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - Prob. 17PCh. 4 - Prob. 18PCh. 4 - Prob. 19PCh. 4 - Prob. 20PCh. 4 - Prob. 21PCh. 4 - Prob. 22PCh. 4 - Prob. 23PCh. 4 - Prob. 24PCh. 4 - Prob. 25PCh. 4 - Prob. 26PCh. 4 - Prob. 27PCh. 4 - Prob. 28PCh. 4 - Prob. 29PCh. 4 - Prob. 30PCh. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51PCh. 4 - Prob. 52PCh. 4 - Prob. 53PCh. 4 - Prob. 54PCh. 4 - Prob. 55PCh. 4 - Prob. 56PCh. 4 - Prob. 57PCh. 4 - Prob. 58PCh. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63PCh. 4 - Prob. 64PCh. 4 - Prob. 65PCh. 4 - Prob. 66PCh. 4 - Prob. 67PCh. 4 - Prob. 68PCh. 4 - Prob. 69PCh. 4 - To buy a 150,000 house, you take out a 9% (APR)...Ch. 4 - Prob. 71PCh. 4 - Prob. 72PCh. 4 - Prob. 73PCh. 4 - Prob. 74PCh. 4 - Prob. 75PCh. 4 - Prob. 76PCh. 4 - Prob. 77PCh. 4 - Prob. 78PCh. 4 - Prob. 79PCh. 4 - Prob. 80PCh. 4 - Prob. 81PCh. 4 - Prob. 82PCh. 4 - Prob. 83PCh. 4 - Prob. 84PCh. 4 - Prob. 85PCh. 4 - Prob. 86PCh. 4 - Prob. 87PCh. 4 - Prob. 88PCh. 4 - Prob. 89PCh. 4 - Prob. 90PCh. 4 - Prob. 91PCh. 4 - Prob. 92PCh. 4 - Prob. 93PCh. 4 - Prob. 1STCh. 4 - Prob. 2STCh. 4 - Prob. 3STCh. 4 - Prob. 4STCh. 4 - Prob. 5ST
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- 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_forwardWhich of the two rates would yield the larger amount in 1 year? (A) 2% compounded quarterly B) 2.02% compounded annuallyarrow_forward4.1 From the interest statement 18% per year, compounded monthly, determine the values for interest period, compounding period, and compounding frequency. 4.2 From the interest statement 1% per month, determine the values for interest period, compounding period, and compounding frequency. 4.3 Determine the number of times interest would be compounded in 6 months from the interest statements ( a ) 18% per year, compounded monthly, ( b ) 1% per month, and ( c ) 2% per quarter. 4.4 For an interest rate of 1% per 2 months, determine the number of times interest would be compounded in ( a) 2 months, ( b ) two semiannual periods, and ( c ) 3 years.arrow_forward
- State the present worth of the following future payments:(a) $8,000 five years from now at 8% compounded annually.(b) $10,000 six years from now at 10% compounded annually.(c) $12,000 eight years from now at 7% compounded annually.(d) $18,000 ten years from now at 9% compounded annually.arrow_forwardWhat will be the amount accumulated by each of the given present investments?(a) $6.000 in 12 years at 8% compounded semiannually.(b) $14,500 in 18 years at 6% compounded quarterly.(c) $12,500 in 7 years at 8% compounded monthly.arrow_forwardIf you deposit $5000 into an account paying 6% annual interest compounded semi-annually, how long(years) until there is $8,000 in the account?arrow_forward
- The value of $ 20000 at the end of 10 years with a nominal interest rate of 7%,a) According to simple interest,b) According to the annual compound interestc) According to monthly compound interest,d) According to the daily compound interest,e) Calculate according to the continuous compound interest.arrow_forwardA contractor obtained a 10000 loan at the rate of 6% compounded annually in order to repair a house. How much must he pay monthly to amortize the loan within a period of 10 years?arrow_forwardCalculate the effective annual interest rate for 18% correspondingto each of the following:(a) compounded semi-annually(b) compounded quarterly(c) compounded bi-monthly(d) compounded monthly(e) compounded weekly(f) compounded daily(g) Compounded continuouslyarrow_forward
- Find the effective interest rate per payment period for an interest rate of 8%compounded monthly for each of the given payment schedule:(a) Monthly(b) Quarterly(c) Semiannually(d) Annuallyarrow_forwardHow is a Compounding Period determined?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_forward
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