Basics Of Engineering Economy
2nd Edition
ISBN: 9780073376356
Author: Leland Blank, Anthony Tarquin
Publisher: MCGRAW-HILL HIGHER EDUCATION
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A fresh graduate engineer decides to start a consulting firm by borrowing $130,000 at interest rate of 13% per year interest, using the formula: a) What is the loan payment each year to pay off the loan in 7 years?, b) Using the above calculation, draw the cash flow diagram
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A new engineering graduate who started a consulting business borrowed money for 1 year to furnish the office. The amount of the loan was $45,800, and it had an interest rate of 10% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default insurance that costs $900. In addition, the bank charged a loan set-up fee of 1% of the loan principal. What was the effective interest rate the engineer paid for the loan?
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- Identify the engineering economy symbols and their values. Use a question mark with the symbol whose value is to be determined. Fifteen years ago your grandfather invested $18,000 in a stock fund to pay for your college education. Each year thereafter, he deposited $2,600 into the fund. If the investments grew at a rate of 8% per year over the 15 years, how much is in the fund now? $18,000 = (Click to select) n A i F P $2,600 = (Click to select) F i A n P 0.08 = (Click to select) P n i A F 15 = (Click to select) n P i A F ? = (Click to select) P n i A Farrow_forwardMr. Angelo borrowed $50,000.00 at a compound interest rate of 3% per month, with a promise to repay the commitment after 1 year. Currently, after seven months, he was approached by his creditor who proposed a discharge for an amount of $65,000.00. Will it be advantageous to accept the proposal?arrow_forwardThe amount of P20,000.00 was borrowed from a lending investor at an interest rate of 5% per month. How the interest is he going to pay at the end of 10months? Solve manuallyarrow_forward
- If the profit from a capital of $1000 is equal to 5% per day and the achieved profit is added to the capital, what will the profit become after a month and after a year?arrow_forwardVebco Water and Gas received a contract for a seawater desalination plant wherein the company expected to make a 28% rate of return on its investment. (a) If Vebco invested $8 million the first year, what was the amount of its profit in that year? (b) What amount would have to be invested to realize the same monetary amount of return if the rate decreases to 15% per year?arrow_forwardConstruct a cash flow diagram that represents the amount of money that will be accumulated in 7 years from an initial investment of $20,000 now and $3,500 per year for 7 years at an interest rate of 8% per year.arrow_forward
- The cost of tuition at a large public university was $390 per credit hour 5 years ago. The cost today (exactly 5 years later) is $585. The annual rate of increase is closest to: (a) 5% (b) 7% (c) 9% (d) 11%arrow_forwardDetermine the size of your investment account 28 years from now (when you plan to retire) if you deposit $13,000 each year, beginning 1 year from now, and the account earns interest at a rate of 7% per year. What is the size of the investment account?arrow_forwardRKI Instruments borrowed $4,800,000 from a private equity firm for expansion of its facility for manufacturing carbon monoxide monitors. The company repaid the loan after 1 year with a single payment of $5,184,000. What was the interest rate on the loan?arrow_forward
- A solid waste disposal company borrowed money at 10% per year interest to purchase new equipment needed. If the company got the loan 2 years ago and paid it off with a single payment of $4,600,000, a) Identify the engineering economy symbols and their values (PW, FW, i%, n) b) Draw the cash flow c) Calculate the principal amount P of the loanarrow_forwardIf money is worth 5% per year, would it be a good investment to spend $100,000 for a new food processing unit (with zero salvage value) which would save spending $12,000 per year for the next 7 years?arrow_forwardWhat is the amount of capital that earns simple interest: a) $1500 at 18% per year in 10 months?b) $8500 at 22% per year in 3 years and 4 months?arrow_forward
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