Carleton University
Department of Civil and Environmental Engineering
Engineering Economics (ECOR 3800A)
ASSIGNMENT # 1
Issued OCT 9, 2010 Due Date
: OCT 22, 2010 at 12:00 Noon
Drop off your location: Filing cabinet near the entrance to the Civil and Environmental
Engineering office.
The cabinet located to the right of room 3424 ME.
===============================================================
(Q1/a)
To withdraw the following $1000 payment series, determine the minimum deposit (P)
you should make now if your deposits earn an interest rate of 10%, compounded
annually. Note that you are making another deposit at the end of year 7 in the amount of
$500.Which the minimum deposit P, your balance at the end of year 10 should be zero.
(Q1/b)
How much do you need to invest in equal annual amounts for the next 10 years if you
want to withdraw $5000 at the end of the eleventh year and increase the annual
withdrawal by $1000 each year thereafter until year 25? The interest rate is 6%,
compounded annually.
(Q1/C)
Ming wants to retire as soon as she has enough money invested in a special bank account
(paying 14% interest, compounded annually) to provide her with an annual income of
$25000. She is able to save $10000 per year, and the account now holds $5000. If she just
turned 20, and expects to die in 50 years, how old will she be when she retires?
There
should be no money left when she turns 70.
(Q1/d)
Compute the present worth for the cash flow diagram below. Assume
i
= 10%
End of period
Deposit
withdrawal
0
P
1 – 6
1000
7
500
8 – 10
1000
0
1
2
3
4
5
6
7
100 100
150 150
200
200
250
250
P
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View Full Document(Q2/a)
What is the future worth of a series of equal yearend deposits of $1200 for 10 years in a
saving account that earns 9%, annual interest, if
a)
All deposits were made at the end of each year?
b)
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 Spring '10
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 Environmental Engineering, Interest Rates, equal yearend deposits

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