3000AQuiz3-S06

# 3000AQuiz3-S06 - Name Date CEE 3000A CIVIL ENGINEERING...

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Name: _____________________________ Date: ____________________ CEE 3000A: CIVIL ENGINEERING SYSTEMS Quiz #3 Spring 2006 CLOSED BOOKS/NOTES (1) Answer the following questions (2 points each) (a) How much should a contractor be willing to spend now for a piece of equipment that will cost \$65,000 three years from now? The interest rate is 8%. (b) How much should a contractor be willing to spend now for a piece of equipment that will cost \$65,000 three years from now, if the interest rate is 8% compounded quarterly? (c) A construction company wants to have enough money to purchase a tractor-trailer at the end of 5 years. If the unit will cost \$350,000, how much should the company set aside each year at an interest rate of 6%?

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2 (d) Your consulting firm wants to start saving money to replace aging network servers. If your company invests \$5,000 two years from now (i.e., at EOY 2) and increases savings by \$500 each year, how much will be in the account 6 years from now (i.e., at EOY 6)? The account will earn an interest rate of 7%. (e) A company expects to draw \$20,000 from an account a year from today, \$19,000 the subsequent year, and amounts decreasing by \$100/year till EOY 10. How much must the company invest today at an interest rate of 5% to ensure these funds are available for withdrawal?
3 (2) The U.S. Army has received two proposals for a turnkey design/build project for

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3000AQuiz3-S06 - Name Date CEE 3000A CIVIL ENGINEERING...

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