ENG106W12_HW1-assignment - many years will it take to...

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ENG 106 Homework #1 Winter 2012 Question 1. You’ve decided to buy a Toyota Prius because of the (recently) high price of gasoline. Like every car, a Prius wears as it ages, providing less in psychological benefits and costing more for maintenance and repair in future years. Therefore you’d like to determine the optimal length of time to keep the Prius before buying a new one. a) What might be one or more possible objectives (“wants”) b) List three or more possible constraints (“needs”) c) What are the decision variables for this problem? d) List at least five pieces of information you might need in order to make a rational decision. e) Track down a reputable source for one of the five pieces of information (part d), and report the value. List a complete reference/contact information for the source. 2.2 You deposit $2000 in a savings account that earns 8% simple interest per year. a) How many years will it take to double your balance? b) If, instead, you deposit the $2,000 in another savings account that earns 7% interest compounded yearly, how
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Unformatted text preview: many years will it take to double your balance? 2.5 You are about to borrow $5,000 from a bank at an interest rate of 9% compounded annually. You are required to make five equal annual repayments in the amount of $1,285.46 per year, with the first repayment occurring at the end of year one. For each year, show the interest payment and principal payment. 2.8 Which of the following alternatives would you choose, assuming the interest rate of 8% compounded annually? Alternative 1: Receive $100 today; Alternative 2: Receive $120 two years from now. 2.10 State the present worth of the following future payments: a) $4,500 6 years from now at 7% compounded annually. 2.17 If $1000 is invested now, $1,500 two years from now, and $2,000 four years from now at an interest rate of 8% compounded annually, what will be the total amount in 10 years?...
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