3424-M0DULE4

# 3424-M0DULE4

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Your Name: IET3424 – Engineering Economy Fall Semester 2016 Module Four Assignment Solve each of the following problems by yourself. You may not work with other students nor may you receive assistance from anyone else. If you have questions then send them to the instructor in an email. To receive full credit for each of the following problems you must show how you arrived at your solution. You must show the equation that you used, the numbers you substituted into that equation, and your final answer to two decimal places. All students must use the factors from the Factor Tables in the back of the textbook and you must show the factor value to the number of decimal places shown in the tables in the back of the textbook. Problem One : For an (nominal) interest rate of 6% per year, compounded monthly, determine the nominal rate per (a) 3 months, and (b) 3 years. Your Answer: a.) 1.50% b. ) 18.00% r = 6% per year compounded monthly m = 12 i = 6%/12 = 0.5% 3mos * 0.5% = 1.5% and 36mos *0.5%= 18% Problem Two: A nominal interest rate of 3% per year, compounded semiannually, is

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