Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 5ST
(a):
To determine
Calculate the monthly payment.
(b):
To determine
Calculate the effective interest rate.
(c):
To determine
Calculate the total outstanding.
(d):
To determine
Calculate the total interest payment.
(e):
To determine
Calculate the present worth.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
On January 1, 2005, a person’s savings account was worth $200,000. Every month thereafter, this person makes a cash contribution of $676 to the account. If the fund was expected to be worth $400,000 on January 1, 2010,
a) what monthly rate of interest was being earned on this fund? Answer is Blank 1
b) what is the nominal rate compounded monthly? Answer is Blank 2
c) What is the equivalent effective interest rate per year? Answer is Blank 3
A large bank has increased its annual percentage rate (APR) on credit cards to 30%. This move was necessary because of the “additional risks” faced by the bank in a weak economy. If monthly compounding is in effect, what is the effective annual interest rate being charged by the bank?
The nominal interest rate is 14% compounded semiannually. What amount will need to be deposited every six months to be able to have enough money to pay three annuity payments of $10,000 for three years beginning at the end of year seven? The deposits begin now and continue every six months until six deposits have been made.
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
Knowledge Booster
Similar questions
- How much should you invest each month in order to have $700,000 if your rate of return is 3.6% compounded monthly and you want to achieve your goal in 40 years?How much interest will you earn?How much should you invest each month in order to have $700,000 if you want to achieve your goal in 20 years?If you deposit the amount you need to achieve your goal in 20 years, how much will your savings be worth after 10 years?arrow_forwardYou borrowed $10,000 from a local bank, with the agreement that you will pay back the loan according to a graduated payment plan. If your first payment is set at $1,500, what would the remaining payment look like at a borrowing rate of 7% over five years? (the value of G approximately is...) $10,000 0 $1.500 20 30 4Garrow_forwardYou have just purchased a home and taken out a $500,000 mortgage. The mortgage has a 30-year term with fixed monthly payments due at the end of each month and a stated annual interest rate of 6% with monthly compounding. a) What is the monthly mortgage payment you will make each month over the next 30 years?arrow_forward
- To help you reach a $16,000 goal 8 years from now, your father offers to give you $4,000 now. You plan to get a part-time job and make five additional deposits, one at the end of each year. (The first deposit is made at the end of the first year.) If all your money is deposited in a bank that pays 6% interest, how large must your annual deposit be?arrow_forwardMr. Smith is planning his retirement. He has decided that he needs to withdraw $12000 per year from his bank account to supplement his other income from Social Security and a private pension plan. How much money should he plan to have in the bank at the start of his retirement, if the bank pays 10% per year, compounded annually, and if he wants money to last for a 12-year retirement period?arrow_forwardA person has made an arrangement to borrow $1,000 now and another $1,000 two years hence. The entire obligation is to be repaid at the end of four years. If the projected interest rates in years one, two, three, and four are 10%, 12%, 12%, and 14%, respectively, how much will be repaid as a lump-sum amount at the end of four years? Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 14% per year. will be repaid as a lump-sum amount at the end of four years. (Round to the nearest dollar.)arrow_forward
- Consider a 30,000 dollars investment which has an annual interest rate of 10%. What is the value at the end of 20 years if the interest is compounded every millisecond?arrow_forwardJon’s grandfather was planning to give him $11,000 in 14 years. Jon has convinced him to pay him $7,000 now, instead. If Jon invests this $7,000 at 6.5% compounded continuously how much money will he have in 14 years? a) What type of problem is this? Select an answer Future Value -Simple Interest Future Value - Compound Interest Future Value - Continuously Compounded Future Value - Ordinary Annuity Future Value - Annuity Due Present Value - Ordinary Annuity Present Value - Annuity Due b) How much will he have? (round to the nearest cent) $arrow_forwardPatricia French received $500,000 from an insurance company after her husband's death. Patricia wants to deposit this amount in a savings account that earns interest at a rate of 5% compounded monthly. Then she would like to make 120 equal monthly withdrawals over the 10-year period such that, when she makes the last withdrawal, the savings account will have a balance of zero. How much can she withdraw each month? ..... The required amount of deposit is $ (Round to the nearest dollar.)arrow_forward
- John takes out a 50 000 mortgage on a home at 12 % % convertible semiannually. He pays off the mortgage with monthly payments for 20 years, the first one due one month after the mortgage is taken out. Immediately after his 60th payment, John renegotiates the loan. He agrees to repay the remainder of the mortgage by making immediate cash payments of 10 000 and repaying the balance by means of monthly payments for ten years at 11% convertible semiannually. Find the amount of his new payment.arrow_forward1. You needed $10,000 and obtained the following loan: Loan specifics: You are expected to pay 24 equal monthly installments (SA per month) at APR 12%, compounded monthly, starting from a month from obtaining the loan. If you miss a payment, your APR goes up to 24%, duration of the loan does not change but your monthly fixed payments go up. You miss your 12th payment. On the day of your 13th payment, the bank offers you a new deal. If you pay an additional $820 at the time of your 13th payment, you will continue to make your payments as before with no interest hike. a) Would you prefer to make the additional payment or have the interest hike?arrow_forwardYou deposit $100 now, and another $100 at the end of 20 years. The account earns a nominal discount rate of 4% compounded monthly for the first 20 years, and a nominal discount rate of d(52) compounded weekly thereafter. If the account has $700 at the end of 40 years then find this nominal discount rate compounded weekly.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:PEARSONEngineering 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 LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial 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