Econ Exam 1

# Econ Exam 1 - Name (first then last) Amz 4/241; c M Wm if...

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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¢ 3Q \ ,ﬁz w J L »-12v , - c j . L_____,.' H405 : CV L ) 2. What is the simple annual interest rate? P «l (9 « “9) x \r.‘ «L pﬁ‘vlotlL ,l I J . : iiixri‘ 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? ;: ; p . QF/P) IV“: KTJLLJ ' -'-— 56737 ‘i l A \fr/l ) (A/P/ ,o%’/O> ..: l“ Ir W 3 lit\c:\ v i , l [62.70 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 five-year 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.

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Econ Exam 1 - Name (first then last) Amz 4/241; c M Wm if...

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