ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 94P
(a)
To determine
To find: The annual effective interest rate.
(b)
To determine
To find: The equivalent interest rate per 1/252 a year.
(c)
To determine
To find: The subscriber’s cost per copy.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The profit from the sale of a product is expected to increase at an annual rate of 8%. First-year
profits are estimated at $60,000, the horizon is 15 years, and the interest rate is 10% per year.
Show me how you would calculate the equivalent present value of the fifteen years of product
profits.
Suppose you deposit $1,000 in a bank savings account that pays interest at a rate of 8% per year. Assume that you do not withdraw the interest earned at the end of each period (year) but instead let it accumulate. (1) How much would you have at the end of year 3 with simple interest? (2) How much would you have at the end of year 3 with compound interest?
Suppose that under the Plan of Repayment one should pay off the debt in a number of equal end-of-month installments (principal and interest). This is the customary way to pay off loans
on automobiles, house mortgages, etc. A friend of yours has financed $15,000 on the purchase of a new automobile, and the annual interest rate is 6% (0.5% per month).
a. Monthly payments over a 36-month loan period will be how much?
b. How much interest and principal will be paid within three month of this loan?
Click the icon to view the interest and annuity table for discrete compounding when i = 0.5% per month.
a. The monthly payment over a 36-month loan period is $ 456.3. (Round to the nearest cent.)
b. Fill in the table below. (Round to the nearest cent.)
Payment Number
1
2
3
Interest Payment
$
$
$
Principal Repayment
$
$
$
Remaining Loan Balance
$
$
$
Chapter 4 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 4 - Prob. 1QTCCh. 4 - Prob. 2QTCCh. 4 - Prob. 3QTCCh. 4 - Prob. 4QTCCh. 4 - Prob. 5QTCCh. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 3PCh. 4 - Prob. 4PCh. 4 - Prob. 5P
Ch. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 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 - Prob. 70PCh. 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. 94PCh. 4 - Prob. 95PCh. 4 - Prob. 96PCh. 4 - Prob. 97PCh. 4 - Prob. 98PCh. 4 - Prob. 99PCh. 4 - Prob. 100PCh. 4 - Prob. 102PCh. 4 - Prob. 103PCh. 4 - Prob. 104PCh. 4 - Prob. 105PCh. 4 - Prob. 106PCh. 4 - Prob. 107PCh. 4 - Prob. 108PCh. 4 - Prob. 109PCh. 4 - Prob. 110PCh. 4 - Prob. 111PCh. 4 - Prob. 112PCh. 4 - Prob. 113PCh. 4 - Prob. 114PCh. 4 - Prob. 115PCh. 4 - Prob. 116PCh. 4 - Prob. 117PCh. 4 - Prob. 118PCh. 4 - Prob. 119PCh. 4 - Prob. 120PCh. 4 - Prob. 121PCh. 4 - Prob. 122PCh. 4 - Prob. 123PCh. 4 - Prob. 124PCh. 4 - Prob. 125PCh. 4 - Prob. 126P
Knowledge Booster
Similar questions
- Suppose that under the Plan of Repayment one should pay off the debt in a number of equal end-of-month installments (principal and interest). This is the customary way to pay off loans on automobiles, house mortgages, etc. A friend of yours has financed $15,000 on the purchase of a new automobile, and the annual interest rate is 6% (0.5% per month). a. Monthly payments over a 36-month loan period will be how much? b. How much interest and principal will be paid within three month of this loan?arrow_forwardThe effective interest rate is 9.38%. If interest is compounded monthly, what is the nominal interest rate?arrow_forwardCalculate the effective annual rate of interest which is equivalent to an effective rate of interest of 2.2% paid every 5 years (correct answer = 0.43618, no tables, ONLY formulas, please)arrow_forward
- Q 10 pleasearrow_forwardYou will deposit 11,922 at 10% compound interest for 6 years, and then move the amount you would receive to an investment account at 14% simple interest for another 3 years. How much money would you have at the end of the entire period?arrow_forwardSuppose you were given a one time gift of $10,000 to put into a savings account. The account earns 3% per year. You are unable to withdraw any money from the account until you retire (assume 35 years). How much will the account be worth when you retire?arrow_forward
- A geometric gradient that increases at f= 8% per year for 12 years is shown in the accompanying diagram. The annual interest rate is 12%. What is the present equivalent value of this gradient?arrow_forward☐ Your company plans to buy a new vehicle, with a loan payment of $400 per month for 60 months. You estimate that the cost of gas will be $50 in the first month and increase by 1% each month. What is the present equivalent of the loan and gas costs for the vehicle over the 60 months of the loan, assuming an interest rate of 8%? Typed numeric answer will be automatically saved.arrow_forwardA bond pays a semiannual coupon, and the last coupon was paid 61 days ago. If the annual couponpayment is $75, what is the accrued interest? (Assume 182 days in the 6-month period.)arrow_forward
- fee cash flow diagramarrow_forwardYou borrow $5000 from a family member and agree to pay it back in 5 months.Because you are part of the family, you are only being charged an interest at therate of 0.5% per month. How much will you owe after 6 months? How much is theinterest? What is the effective interest rate? What is the corresponding nominalrate?arrow_forwardIf the effective interest is equal to 19.56%, compute the nominal rate if money is compounded 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: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