Engineering Economy (17th Edition)
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 8, Problem 57FE
To determine

Calculate the future value.

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The average annual cost(tuition, fees, and room and board) at four-year private universities rose from $6,070in 1980 to $29,257 in 2004. Calculate the percentage rise in cost from 1980 to2004, and compare it to the overall rate of inflation as measured by the Consumer Price Index. The Consumer Price Index for 1980 is82.6and the Consumer Price index for 2004 is 188.9.The percentage rise in cost from 1980 to 2004 is %??(Round to the nearest tenth as needed.)
Suppose that you borrow $20,000 at 12%, compounded monthly, over 5 years. Knowing that the 12% represents the market interest rate, the monthly payment in actual dollars will be $444.90. If the average monthly general inflation rate is expected to be 0.5%, what is the equivalent equal monthly payment series in constant dollars? A. $386 B. $486 C. $345 D. $445
Shea is pricing materials (wood, wire, pipe, etc.) for new home construction on a “per unit” basis. Inflation on materials has been running at 16.0% for the past 3 years and is expected to remain at that rate for the next 10 years. The actual dollars paid for expenses at the end of year 3 for a “unit” are $55,000. Solve, a. What did the same set of materials cost 3 years ago? b. If the trend continues, what will they cost 10 years from now?
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