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Unformatted text preview: IE 343A Engineering Economics Homework #2 Due date: Sep. 17 th 1. What lumpsum amount of interest will be paid on a $10,000 loan that was made on Aug. 1, 2008, and repaid on Nov. 1, 2012, with ordinary simple interest at 10% per year? 2. Jim loans Juanita $10,000 with interest compounded at a rate of 6% per year. How much money will Juanita owe Jim if she repays the entire loan at the end of five years? 3. Ashlea purchased 100 shares of Microsoft at a price of $25 per share. She hopes to double her investment. How long will she have to wait if the stock price increases at a rate of 10% per year? 4. In 1885, firstclass postage for a oneounce letter cost $0.02. The same postage in 2007 costs $0.41. What compounded annual increase in the cost of firstclass postage has been experienced over this period of time? 5. Albert Einstein once noted that compounding of interest is one of humanitys great inventions. To illustrate the mindboggling effects of compounding, suppose $100 is invested at the end of each year for...
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 Spring '08
 Vincent,G

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