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Unformatted text preview: Name (first then last) Amz 4/241; c M Wm if if Exam #1: Engineering Economics I
Fall 2007 $140.50
A 1 2 3 years $100 1. What is the APR for this cash flow, compounded annually? 1 (pm: W;KU¢
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H405 : CV L ) 2. What is the simple annual interest rate?
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3. If interest is compounded monthly, what is the monthly interest rate? F:PC‘M» “WLR\'“ \""" *****£§¥¥;***************************************************** 4. A loan company offers money at 1.5% per month, compounded continuously.
What is the effectively annual interest rate? , (\4 l ‘
v '4 +QKY 'l Exam #1  Engineering Economics 1  Fall 2007 page 2 A $1,000 loan is to be repaid in 10 years at 10% annual interest rate. 5. If there is only one payment at the end of the 10 years, how much is it?
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l. »~—’“ 7. If there are 10 payments increasing in size by $20, then how much is the first
payment? ' , .‘>~u~.__._,. 8. If there are 10 payments increasing in size by 5%, then how much is the first
payment? ~ IC‘ Exam #1 — Engineering Economics I  Fall 2007 page 3 I invested $10,000 in the Big Bevo Robot Company. Their robots service the
Homeland Security Bomb Squad and the UT Fraternity parties, because the work is so
similar. The robotic income supports a return on the $10,000 investment of $500 per
month. 9. What is the monthly Interest rate that I’m earning? , l
LA .. ml 10. What is effectiver the yearly interest rate? 11. What is the payback period for this investment? l 9/; Lyn 12. If money is worth 12% APR, what is the discounted payback period for this investment? ‘
ANL' 5kg“ T6. Lu. no} Exam #1  Engineering Economics I  Fall 2007 page 4 } $3,000 l
$2,000 $23000 $2,0'po $2,000
. i 1 T
1 2 = 3 4 t 5 Years
6% 5 10% 5 8%
Compounded Compounded Compounded
quarterly quarterly quarterly Consider the cash flow diagram above, which represents three different interest rates
applicable over the fiveyear time span shown. Payments are annual, but interest is
compounded quarterly. 13. What is the future value of the cash flow at time n=5? In other words, the
single payment equivalent at time n=5. r/ up V ‘ Ll) gig,"zk! ' 3+ H.— ___\m y M“ ***************************************************************** 14. Suppose you deposit $500 at the end of each quarter for 5 years at an annual
interest rate of 8% compounded monthly. <What equal end—of—year deposit over
the 5 years would accumulate to the same amount at the end of the 5 years
under the same interest compounding? Exam #1  Engineering EconomicsI  Fall 2007 15. Circle the correct answer. Show your work. Ems N) 221 (e) 221 +1 (f) None of the above page 5 ...
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This test prep was uploaded on 03/19/2008 for the course EE 366 taught by Professor Pore during the Spring '08 term at University of Texas at Austin.
 Spring '08
 Pore

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