Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 5, Problem 65SE
To determine
Calculate the number of time period.
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A bank features a savings account that has an annual percentage rate of r = 2.9% with interest
compounded semi-annually. Chris deposits $4,000 into the account.
The account balance can be modeled by the exponential formula S(t)
P =
n
future value, P is the present value, r is the annual percentage rate, n is the number of times each year
that the interest is compounded, and t is the time in years.
(A) What values should be used for P, r, and n?
r =
n =
nt
r
= P(1 + where S is the
(B) How much money will Chris have in the account in 9 years?
Answer = $
Round answer to the nearest penny.
"
(C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective
annual percentage rate which includes all compounding in the year).
APY =
Round answer to 3 decimal places.
If you borrowed $30,000 at 25% annual interest. You agreed to repay the loan with five equal annual payments.
How much of the total amount repaid is interest?
How much of the third annual payment is interest, and how much principal is there?
If you decided to pay off your loan after the third payment, how much will you pay?
(Please Include Equations used and cashflow diagram)
(Please don't use excel)
Draw the cash flow diagrams corresponding to the formulas given below. Specify the interest rates and the period in which the X value is calculated. (Note: You are not expected to calculate the X value!)
a. X = [300(F/A; %6; 4) - 100 (F/P; %6; 2)1(A/P; %6; 2)
b. X = [300(F/A, %10,3)-200(F/G, %10,3)](F/P,%10,1) + [300(F/A,%10,3) + 200(F/G,%10,3)|(P/F,%10,3)
Chapter 5 Solutions
Engineering Economy (17th Edition)
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- For a simple interest loan with interest rater (expressed as a decimal), the amount A due at the end of t years on a principal P borrowed is P = A(1 + rt). (A) True B Falsearrow_forwardA company borrowed $120,000 at an interest rate of 9% to be repaid over a period of six years. The loan will be repaid in installments according to the cash-flow diagram shown herewith (which also reflects the cash inflow of $120,000). What is the size of the last payment (X) required to pay off the loan?arrow_forwardIf you borrowed $30,000 at 25% annual interest. You agreed to repay the loan with five equal annual payments. How much of the total amount repaid is interest? How much of the third annual payment is interest, and how much principal is there? If you decided to pay off your loan after the third payment, how much will you pay? (Please Include Equations used and cashflow diagram)arrow_forward
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