ENGR 301/2G - Assignment 4
Assignments must be submitted ON-LINE on the course website (using Moodle)
Check the best answer (closest (o the exact answer such that the absolute value
lanswer given — exact answer| is minimum) for each question
4-1 A. $5000 Joan was repaid with 8% simple annual interest. A total of $5350 was paid.
How long had the loan been outstanding? (10.5 months 15.1 months 11.0 months 19.6 months)
42-44 The following series of payments are data for questions 4-2 ~ 4-4:
‘Year ‘End-of-Year Payment
1 $1400
2 1320
3 1240
4 1160
5 1080
4-2, What present sum (ie. at time 0) is equivalent to
above series of payments at a 10% interest rate? ($3656 $4471 $4758 $5915)
4-3. What future sum (ie. at time 5) is equivalent to
above series of payments at a 10% interest rate? ($7660 $7212 $6666 $5995)
4-4 What single sum at year 3 is equivalent to
above series of payments at a 10% interest rate? (85758 $4712 $3808 $6137)
4-5. A sum of Q will be received 6 years from now. At 4% annual
interest, the present worth now of Q is $70. At the same
interest rate, what would be the value of Q in 10 years? ($103 $87 $113 $98)
4.6 A certain piece of equipment will cost $125,000 in five years
How much will it cost today if the interest rate is 12%? ($83,351 $70,235 $61,325 $93,135)
4-7 Asum of money invested at 3% per 6-month period (so
semi-annually) will double in approximately how many years? (11.7 yrs 17.5 yrs 13.1 yrs 15.4 yrs)
4-8 Two thousand dollars is borrowed for one year at an interest rate of 1.1% per month.
If the same amount of money can be borrowed at an interest rate
of 13.2% per year, how much could be saved in interest charges? (S15 $18 $14 $16)4-9 Given the following cash flow diagram, where #=10%.
800 800 800
aka
‘What is the value of E? ($1041 $1107 $1070 $994)
Note:
sking questions in this manner is common in cconomies. What is implied is that the value of the
revenues balances the value of the expenses (as long as these values are evaluated at the same time).
4-10 The following cash flow transactions are said to be equivalent in terms of economic desirability at an
interest rate of 10% compounded annually.
1
Determine the unknown value A ($530 $494 $472 $500)
ata
nla
ola
alsa
> 300
=
o| 370
E
0 S 0123485
‘Note: Asking questions in this manner is common in economies. What is implied is that the value of the
cash flow on the left is the same as the value of the cash flow on the right (as long as these values are
evaluated at the same time).