CEE3000HW3-Spr08 - Name: _ Date: _ CEE 3000: CIVIL...

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Name: _________________________ Date: ____________________________ CEE 3000: CIVIL ENGINEERING SYSTEMS Homework #3 Spring 2008 1. Answer the following questions (10 points) a) A publicly traded construction company reported that it just paid off a loan that it received 3 years earlier. If the total amount of money the company paid was $1.6 million and the interest rate on the loan was 8%, how much money did the company borrow three years ago? (Always assume the interest rate is a compound rate unless otherwise stated). b) To improve crack detection in aircraft, the U.S. Air Force combined ultrasonic inspection procedures with laser heating to identify fatigue cracks. Analysis for a 5-year planning period indicates that early detection of the cracks is expected to reduce repair costs by as much as $100,000 this year and another $100,000 three years from now. What is the future value of these savings at the end of the planning period if the interest rate is 7%? c) How much money can a construction company spend now instead of spending $50,000 three years from now to purchase a new truck when the interest rate is 15%? d) An independently owned moving company wants to have enough money to purchase a new tractor-trailer in 4 years. If the unit will cost $250,000, how
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This note was uploaded on 06/29/2009 for the course CEE 3000 taught by Professor Meyer during the Spring '07 term at Georgia Tech.

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CEE3000HW3-Spr08 - Name: _ Date: _ CEE 3000: CIVIL...

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