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EGR 102 Introduction to Engineering Modeling
Lab 03B Homework
As an engineer you are asked to determine the maximum number of machines which
can be purchased for a manufacturing assembly line. The company has $200,000
currently available and needs as many machines as possible as soon as possible. A
company manager tells you to figure out how many machines to purchase knowing that
the company will be able to support yearly payments of $70,000 for a loan. Each
machine costs $90,000 and loan details from 5 different banks can be found below.
Bank 1
Bank 2
Bank 3
Bank 4
Bank 5
Interest rate (i) %
9.5
9.2
6.9
7.5
8.8
Payment period (n)
9
8
8
9
6
Loan Amount (P) $
390,000 440,000 520,000 380,000 290,000
The annual payment for each bank loan may also be calculated using the equation:
± ² [
³(´µ³)
¶
(´µ³)
¶
·´
]
where
P ($)
is the present amount of money given to you from the loan,
i (%)
is the
annual interest rate in decimal format,
A ($)
is the annual payment amount, and
n
(years)
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This note was uploaded on 04/02/2012 for the course EGR 100 taught by Professor Hinds during the Fall '08 term at Michigan State University.
 Fall '08
 HINDS

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