INE 320 Engineering Economy I
CHAPTER III
LOANS
Outline
Amortized Loans
Concept of Balance in Loans
Amortized Loans:Tabular Method
Amortized Loans:Remaining-Balance Method
Add-On Interest Loans
Mortgage
Mortgage: Fixed Rate
Example: Interest-Only versus F
INE 320 Engineering Economy I
PROBLEM SOLVING SESSION 1
Problem 1:
You make eight annual deposits in the amounts of ($2,000; $1,800; $1,600; $1,400; $1,200; $1,000;
$800; $600) into a bank account that earns an interest rate of 4% compounded quarterly. De
INE 320 Engineering Economy I
PROBLEM SOLVING SESSION 3
Problem 1:
Consider the following project cash flow, and a MARR of 8%:
a)
Find the values of i* for the project and show that the project is a mixed investment.
b)
Compute the Internal Rate of Return
INE320 Engineering Economy
Exam I, Spring 2014
Thursday, March 20, 2014-3:30 pm to 4:30 pm and 5:00 pm to 6:00 pm
Name:.
ID#
:.
Note: Formulae and Tables are provided at the end of the booklet.
Problem I.
15%
Consider the cash flow series shown below. Fin
INE 320 Engineering Economy I
PROBLEM SOLVING SESSION 2
Problem 1:
Consider the following cash flow diagram:
a. Calculate the exact simple payback period.
b. Calculate the exact discounted payback period if the MARR is 15%.
c. Is this project acceptable a