Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Question
Chapter 4, Problem 89P
To determine
Calculate the present value.
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You purchased a winning ticket for a $5 million lottery which pays $500,000 immediately and the rest in 9 annual installments. A finance company called and offered you $3 million for it. Would you accept the offer if the rate is 10%
How much must be invested now at 6% simple interest to accumulate $1,000 at the end of 5 years?
Choose an answer by clicking on one of the letters below, or click on "Review topic" if needed.
A P = $1,000 / [ 1 + (0.06)(5) ] = $1,000 / 1.30 = $769
B F = $1,000 [ 1 + (0.06)(5) ] = $1,000 (1.30) = $1,300
C P = $1,000 / 5 = $200
D P = $1,000 (P/F,6%,5) = $1,000 (0.7473) = $747
Use interest tables. Suppose that $1,000 is invested for 4 years at an interest rate of 12%, compounded quarterly. How much will be in the account at the end of 4 years?
Choose an answer by clicking on one of the letters below, or click on "Review topic" if needed.
A F = $1,000 (F/P,12%,4) = $1,000 (1.574) = $1,574
B F = $1,000 (F/P,12%,16) = $1,000 (6.130) = $6,130
C F = $1,000 (F/P,3%,4) = $1,000 (1.126) = $1,126
D F = $1,000 (F/P,3%,16) = $1,000 (1.605) = $1,605
Chapter 4 Solutions
Engineering Economy (17th Edition)
Ch. 4 - Compare the interest earned by 9,000 for five...Ch. 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
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