Glasgow 1
4.13
What is the effective annual interest rate if the nominal interest rate is 6%, compounded
monthly?
The effective annual interest rate is equal to 1 plus the nominal interest rate in percent divided
by the number of compounding periods per y
Glasgow 1
6.16
What single amount at the end of the fifth year is equivalent to a uniform annual series of
$2000 per year for ten years, if the interest rate is 10%, compounded annually?
What single investment, P, compounded at 10% annually over 5 years,
Glasgow 1
1.14
How much interest would be due at the end of one year on a loan of $10,000 if the interest
is 12% per year? Simple Interest I = (P) (n) (i)
Find I where P = $10000, n = 1 yr, and i = 0.12
I = $10000(1)(0.12)
= $1200
1.16
If $300 is earned i
Glasgow 1
8.15 With a negative NPV (-$5 336 645.33, according to Solution 14) the investment is
unacceptable.
8.17
A different plant can be built for an initial investment of $13 million and no supplemental
investments. Is the investment still economicall
Glasgow 1
5.11
What effective annual interest rate corresponds to a nominal interest rate of 15% per
year, compounded continuously?
in = er - 1
= e0.15 -1
= 0.16183
= 16.18%
5.12
What nominal interest rate corresponds to an effective interest rate of 12%
Glasgow 1
7.13
A machine costs $40,000 to purchase and $10,000 per year to operate. The machine has
no salvage value and a ten-year life. Given i% per year, compounded annually, what is
the equivalent uniform annual cost of the machine?
(see Example 7.8)
Glasgow 1
8.15 With a negative NPV (-$5 336 645.33, according to Solution 14) the investment is
unacceptable.
8.17
A different plant can be built for an initial investment of $13 million and no supplemental
investments. Is the investment still economicall
Glasgow 1
2.21
An investment plan pays 13.5% per year, compounded annually. How much would have
to be invested every year so that $40,000 will be accumulated by the end of 10 years?
A = F (i / (1+ i)n - 1)
= 40000 ( 0.135/ (1.13510 - 1)
= 2119.48
2.23
Sup
IE 492 Makeup QUIZ 2
DATE: 4/01/2016
Beverly M Glasgow
1. A bank pays interest at the rate of 5% per year, compounded monthly. If a person deposits
$5000 in a savings account at the bank. How much money will accumulate by the end of 5
years?
F = 5000(1 +
IE 492 Makeup QUIZ 1
DATE: 04/01/2016
Beverly M Glasgow
1. What is the annual rate of simple interest if $400 is earned in four months on an investment of
$30,000?
Simple Interest = P ( i ) n , so 400
400/10,000
= 30 000 x i x
= i = 0.04 = 4%
2. Let the
NEW JERSEY INSTITUTE OF TECHNOLOGY
Department of Mechanical and Industrial Engineering
COURSE:
IE-492 ENGINEERING MANAGEMENT (HYBRID) - Sections 102 and 104
SEMESTER:
Spring 2017
INSTRUCTOR:
Amit Desai, Project Manager at Mechan
4.13. i=n/t = 6%/1
=6% per year
4.15. a. i=(1+(r/m)^m-1
=(1+(0.01/365)^365)-1) = 10.515%
b. i=(1+(r/m)^m-1
=(1+(0.01/182.5)^182.5)-1) = 5.0625%
4.17. a. F = $2000(F/P,6%,5)
2000*1.338=$2676
b. $2000(F/P,1.5%,20)
2000*1.347=$2694
c. $2000(F/P,0.5%,60)
2000
CHAPTER 1
Project Management Concepts
True/False
1.
A project is an endeavor to accomplish a specific objective through a unique set of
interrelated tasks and the effective utilization of resources.
2. The objective of a project is usually defined in term
i = interest rate per interest period
n = number of interest periods
P = present sum of money or present worth (also called principle)
F = future worth of money at the end of n periods
A = end of period payment or annual payment
G = constant amount increa
Simple and Compound Interest:
S1 = P(1+i) where P is interest earned after one period
Sn = P(1+i)n After n period
P
F
=
F (1+i)n
Single Payment:
Compound Interest m Times Annually:
Future Value of Annuity:
i mn
S n=P(1+ )
m
F=A 1 (1+i )n1 + A 2 (1+i )n2 .
CHAPTER3
ProposedSolutions
True/False
1. While contacts with potential clients should be frequent, it is best to avoid discussing
common personal interests and instead focus strictly on business.
ANSWER: F
2. TheDevelopaProposedSolutionphaseoftheprojectli