slides session 2 TVOM class Pt1 chrt 3.ppt

P 2000pa 55 p 2000432948 865896 p pv55 2000 p 865895

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P = \$2000(P|A 5%,5) P = \$2000(4.32948) = \$8658.96 P =PV(5%,5,-2000) P = \$8658.95

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Principles of Engineering Economic Analysis , 5th edition Example 2. 17 Troy Long deposits a single sum of money in a savings account that pays 5% compounded annually. How much must he deposit in order to withdraw \$2,000/yr for 5 years, with the first withdrawal occurring 1 year after the deposit? P = \$2,000(P|A 5%,5) P = \$2,000(4.32948) = \$8,658.96 P =PV(5%,5,-2000) P = \$8658.95
Principles of Engineering Economic Analysis , 5th edition Example 2. 17 Troy Long deposits a single sum of money in a savings account that pays 5% compounded annually. How much must he deposit in order to withdraw \$2,000/yr for 5 years, with the first withdrawal occurring 1 year after the deposit? P = \$2,000(P|A 5%,5) P = \$2,000(4.32948) = \$8,658.96 P =PV(5%,5,-2000) P = \$8,658.95

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Principles of Engineering Economic Analysis , 5th edition Example 2. 18 Troy Long deposits a single sum of money in a savings account that pays 5% compounded annually. How much must he deposit in order to withdraw \$2,000/yr for 5 years, with the first withdrawal occurring 3 years after the deposit? ( Hint: Draw the CFD first!) P = \$2000(P|A 5%,5)(P|F 5%,2) P = \$2000(4.32948)(0.90703) = \$7853.94 P =PV(5%,2,,-PV(5%,5,-2000)) P = \$7853.93
Principles of Engineering Economic Analysis , 5th edition Simple Interest Cash Flow Diagram

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Principles of Engineering Economic Analysis , 5th edition Example 2. 18 P = \$2,000(P|A 5%,5)(P|F 5%,2) P = \$2,000(4.32948)(0.90703) = \$7,853.94 P =PV(5%,2,,-PV(5%,5,-2000)) P = \$7853.93
Principles of Engineering Economic Analysis , 5th edition Example 2. 18 Excel P = \$2,000(P|A 5%,5)(P|F 5%,2) P = \$2,000(4.32948)(0.90703) = \$7,853.94 P =PV(5%,2,,-PV(5%,5,-2000)) P = \$7,853.93

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Principles of Engineering Economic Analysis , 5th edition Example 2. 19 Rachel Townsley invests \$10,000 in a fund that pays 8% compounded annually. If she makes 10 equal annual withdrawals from the fund, how much can she withdraw if the first withdrawal occurs 1 year after her investment? A = \$10,000(A|P 8%,10) A = \$10,000(0.14903) = \$1490.30 A =PMT(8%,10,-10000) A = \$1490.29
Principles of Engineering Economic Analysis , 5th edition Example 2. 19 Rachel Townsley invests \$10,000 in a fund that pays 8% compounded annually. If she makes 10 equal annual withdrawals from the fund, how much can she withdraw per year if the first withdrawal occurs 1 year after her investment? A = \$10,000(A|P 8%,10) A = \$10,000(0.14903) = \$1,490.30 A =PMT(8%,10,-10000) A = \$1490.29

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Principles of Engineering Economic Analysis , 5th edition Example 2. 19 Rachel Townsley invests \$10,000 in a fund that pays 8% compounded annually. If she makes 10 equal annual withdrawals from the fund, how much can she withdraw if the first withdrawal occurs 1 year after her investment? A = \$10,000(A|P 8%,10) A = \$10,000(0.14903) = \$1,490.30 A =PMT(8%,10,-10000) A = \$1,490.29
Principles of Engineering Economic Analysis , 5th edition Example 2.22 (note the skipping) Suppose Rachel delays the first withdrawal for 2 years. How much can be withdrawn each of the 10 years? A = \$10,000(F|P 8%,2)(A|P 8%,10) A = \$10,000(1.16640)(0.14903) A = \$1738.29 A =PMT(8%,10-FV(8%,2,,-10000)) A = \$1738.29

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Principles of Engineering Economic Analysis , 5th edition Example 2.22 Suppose Rachel delays the first withdrawal for 2 years. How much can be withdrawn each of the 10 years? A = \$10,000(F|P 8%,2)(A|P 8%,10) A = \$10,000(1.1664)(0.14903) A = \$1738.29 A =PMT(8%,10-FV(8%,2,,-10000)) A = \$1738.29
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• Fall '17
• Mike Heny

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