EGG 307 HW 5 - EGG 307: Engineering Economics - Homework...

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EGG 307: Engineering Economics - Homework No. 5 Solutions Spring 2009 Problems : 4-102; 4-105; 4-111; 4-119; 4-122. Notes: 1. APR stands for “annual percentage rating”, which another term for the annual interest rate. 2. For Problem 4-119 Additional question : Repeat the problem, assuming that she will be required to make equal monthly payments. 3. For Problem 4-122 Additional question : Repeat part (b) assuming that the annuity (i.e., annual) withdrawals will be made uniformly and continuously over each year, starting at the beginning of year 31. Solutions: 4-102 (a) For 30-year loan: A = $300,000(A/P, 0.5%, 360) = $300,000 x 0.0060 = $1,800/month For 50-year loan: A = $300,000(A/P, 0.5%, 600) = $300,000 x 0.0053 = $1,590/month The difference is $210/month (b) Total interest amount paid for 30 year mortgage = $1,800 x3 60 – 300,000 = $348,000 Total interest amount paid for 50 year mortgage = $1,590 x 600 – 300,000 = $654,000 The difference is $306,000 4-105 Using quarters as analysis periods:
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This note was uploaded on 07/13/2009 for the course EGG a taught by Professor Dr.kaseko during the Spring '09 term at University of Nevada, Las Vegas.

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EGG 307 HW 5 - EGG 307: Engineering Economics - Homework...

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