assignment-1-fall-2010

assignment-1-fall-2010 - Carleton University Department of...

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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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(Q2/a) What is the future worth of a series of equal year-end 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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assignment-1-fall-2010 - Carleton University Department of...

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