ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667
8th Edition
ISBN: 9781307584394
Author: Blank
Publisher: MCG/CREATE
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Chapter 1, Problem 59APQ
To determine
Calculate the interest rate.
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Solve the following problems:
1. In order to build a new warehouse facility, the regional distributor for Valco
Multi-Position Valves borrowed $1.6 million at 10% per year interest. If the
company repaid the loan in a lump sum amount after 2 years, what was (a) the
amount of the payment, and (b) the amount of interest?
2. A sum of $2 million now is equivalent to $2.42 million 1 year from now at what
interest rate?
3. In order to restructure some of its debt, General Motors decided to pay off one
of its short-term loans. If the company borrowed the money 1 year ago at an
interest rate of 8% per year and the total cost of repaying the loan was $82 million,
what was the amount of the original loan?
4. How many years would it take for an investment of $280,000 to cumulate to at
least $425,000 at 15% per year interest?
5. Valtro Electronic Systems, Inc. set aside a lump sum of money 4 years ago in
order to finance a plan expansion now. If the money was invested in a 10% per
year simple…
An interest rate of 12% per year, compounded monthly, is nearest to: (a) 12.08% per year (b) 12.28% per year (c) 12.48% per year (d) 12.68% per year
The compound interest rate per year that amounts of $1000 one year ago and $1345.60 one year hence are equivalent to is closest to: (a) 8.5% per year (b) 10.8% per year (c) 20.2% per year (d ) None of the above
Chapter 1 Solutions
ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667
Ch. 1 - Prob. 1PCh. 1 - Prob. 2PCh. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Prob. 5PCh. 1 - Prob. 6PCh. 1 - Prob. 7PCh. 1 - Prob. 8PCh. 1 - Prob. 9PCh. 1 - Prob. 10P
Ch. 1 - Prob. 11PCh. 1 - Prob. 12PCh. 1 - Prob. 13PCh. 1 - Prob. 14PCh. 1 - Prob. 15PCh. 1 - Prob. 16PCh. 1 - Determine the amount of money FrostBank might loan...Ch. 1 - Prob. 18PCh. 1 - Prob. 19PCh. 1 - Prob. 20PCh. 1 - Prob. 21PCh. 1 - Prob. 22PCh. 1 - Prob. 23PCh. 1 - Prob. 24PCh. 1 - To attract new customers, EP Employees Credit...Ch. 1 - Prob. 26PCh. 1 - Prob. 27PCh. 1 - Prob. 28PCh. 1 - Prob. 29PCh. 1 - Prob. 30PCh. 1 - Prob. 31PCh. 1 - Prob. 32PCh. 1 - State University tuition and fees can be paid...Ch. 1 - Prob. 34PCh. 1 - Prob. 35PCh. 1 - Prob. 36PCh. 1 - Prob. 37PCh. 1 - Prob. 38PCh. 1 - Prob. 39PCh. 1 - Prob. 40PCh. 1 - Prob. 41PCh. 1 - Prob. 42PCh. 1 - Prob. 43PCh. 1 - What is the weighted average cost of capital for a...Ch. 1 - Prob. 45PCh. 1 - Prob. 46PCh. 1 - Prob. 47PCh. 1 - Prob. 48ESCh. 1 - Prob. 49ESCh. 1 - Prob. 50ESCh. 1 - Prob. 51ESCh. 1 - Prob. 52APQCh. 1 - Prob. 53APQCh. 1 - Prob. 54APQCh. 1 - Prob. 55APQCh. 1 - Prob. 56APQCh. 1 - Prob. 57APQCh. 1 - Prob. 58APQCh. 1 - Prob. 59APQCh. 1 - Prob. 60APQCh. 1 - Prob. 61APQCh. 1 - Prob. 1CSCh. 1 - Prob. 2CSCh. 1 - You developed an interest in the LCOE relation and...
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- 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_forwardThe present worth of a deposit of $1000 now and $1000 every 6 months for 10 years at an interest rate of 10% per year, compounded semiannually is represented by which of the following equations: (a) P = 1000(P∕A,5%,21)(F∕P,5%,1) (b) P = 1000 (P∕A,5%,20) (c) P = 1000 (P∕A,5%,21) (d) P = 1000 + 1000(P∕A,10.25%,10)arrow_forwardThe simple interest rate per year that will accumulate the same amount of money in 2 years as a compound interest rate of 20% per year is closest to: (a) 20.5% (b) 21% (c) 22% (d ) 23%arrow_forward
- For an interest rate of 2% per quarter, determine the effective interest rate (a) quarterly (b) semi-annually (c) yearly, and (d) monthlyarrow_forwardTwo receipts of $1,000 each are desired at the EOYs 10 and 11. To make these receipts possible, four EOY annuity amounts will be deposited in a bank at EOYs 2, 3, 4, and 5. The bank’s interest rate (i) is 12% per year. (a) Draw a cash-flow diagram for this situation. (b) Determine the value of A that establishes equivalence in your cash-flow diagram. (c) Determine the lump-sum value at the end of year 11 of the completed cash-flow diagram based on your answers to Parts (a) and (b).arrow_forwardBasset, a furniture manufacturing company, borrowed $1 million and repaid the loan through monthly payments of $20,000 for 2 years plus a single lump-sum payment of $1 million at the end of 2 years. The interest rate on the loan was closest to: (a) 0.5% per month (b) 2% per month (c) 2% per year (d) 8% per yeaarrow_forward
- What is the amount generated by a capital of $10,000 applied to compound interest for the following terms and rates: Compound interest rate Deadline a) 1.5% per month 12 months b)3.0% per quarter 30 years c) 18% per semester 2 yearsarrow_forward(a) Calculate the amount deposited 1 year ago to have $1000 now at an interest rate of 5% per year. • (b) Calculate the amount of interest earned during this time period. please show me how you solved it mathematicallyarrow_forwardAt a compound interest rate of 10% per year, the amount that $10,000 one year ago is equivalent to now is closest to: (a) $8264 (b) $9091 (c) S11,000 (d ) $12,100arrow_forward
- An engineer who is saving for her retirement plans to deposit $500 every quarter, starting one quarter from now, into an investment account. If the account pays interest at 6% per year, compounded semiannually, the total she will have at the end of 25 years is closest to: (a) $50, 000 (b) $56, 400 (c) $79,700 (d) $112, 800 (e) None of the above b darrow_forwardAn interest rate of 2% per quarter, compounded continuously, is closest to an effective semiannual rate of: (a) 2.00% per semiannual period (b) 2.02% per semiannual period (c) 4.0% per semiannual period (d) 4.08% per semiannual periodarrow_forwardBid 1: 9% per year, compounded quarterly Bid 2: 3% per quarter, compounded quarterly Bid 3: 8.8% per year, compounded monthly (a) Determine the effective rate for each bid on the basis of semiannual periods. (b) What are the effective annual rates? These are to be a part of the final bid selection. (c) Which bid has the lowest effective annual rate?arrow_forward
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