07Econ Test 3 answers - Engineering Economics MIME 2600...

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Engineering Economics – MIME 2600 Test 3 (Optional), April 11, 2007 Name:___________________________________________ (Last, First) Open Book, Closed Notes, 50 Minutes 17 Questions, Multiple Choice Write your name on both test and bubble sheet- Don’t forget to bubble in your name Hand in both test and bubble sheet. Keep your answer sheet covered Problem A: Determine the effective annual interest rate for the following questions: 1) 15% (APR) compounded semiannually. a) 15% b) 15.56% c) 16.08% d) 16.18% 2) 15% (APR) compounded monthly. a) 15.% b) 15.56% c) 16.08% a) 16.18% 3) What is the future value of \$500 today, when compounded for 10 years at an interest rate of 8% (APR) compounding annually? a) \$1000 b) \$1079 c) \$1096 d) \$1110 4) How many years will it take for an investment to grow by a factor of 5 given that the annual interest rate is 10%, compounded annually? a) 6 years b) 12 years c) 17 years d) 23 years

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Problem B: In the year 2000, your favorite coffee cost \$2.00 a cup in 2005 the coffee costs \$4.00 a cup.
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07Econ Test 3 answers - Engineering Economics MIME 2600...

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