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ENGR 301 - Assign3soln

This document contains solutions to problems in Assignment 3 of ENGR 301. It includes calculations for: 1) Determining the present value of a future amount given inflation and time periods 2) Calculating equivalent annual worth, capital recovery factor and present worth for different interest rates and time periods 3) Finding the present value, future value and payment amounts for annuities with different interest rates and time periods 4) Directly calculating the future value over 10 years at an interest rate of 4% rather than calculating intermediate values 5) Solving for the present value given the future value, number of periods, and interest rate in a compound interest problem

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298 views

ENGR 301 - Assign3soln

This document contains solutions to problems in Assignment 3 of ENGR 301. It includes calculations for: 1) Determining the present value of a future amount given inflation and time periods 2) Calculating equivalent annual worth, capital recovery factor and present worth for different interest rates and time periods 3) Finding the present value, future value and payment amounts for annuities with different interest rates and time periods 4) Directly calculating the future value over 10 years at an interest rate of 4% rather than calculating intermediate values 5) Solving for the present value given the future value, number of periods, and interest rate in a compound interest problem

Uploaded by

AP
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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ENGR 301 Assignment 3 solution

3-1

Price now = $89,500 (207.6/163.6) = $113,570.90

3-2

E2 = 28.6 = k 2s
E 2 28.6 2
=
=
E3 28.2 3

and
s

($113,000 is closest)

E3 = 28.2 = 3s

28.6
2
or ln
= s ln or
28.2
3

s=

0.014085
= 0.03474
0.40547

k = 28.6/2s = 28.6/20.03474 = 29.3 hours


E50 = 29.3 * 500.03474 = 25.6 hours

(25.5 is closest)

3-3

($5,350 - $5,000)

/(0.08 x $5,000) = $350/$425 = 0.875 years = 10.5 months (10.5 is closest)

3-4

= $1400 (P/F, 10%, 1) + $1,320 (P/F, 10%, 2) + $1,240 (P/F, 10%, 3) +


$1,160 (P/F, 10%, 4) + $1,080 (P/F, 10%, 5)
= $1,272.73 + $1,090.91 + $931.63 + $792.30 + $670.60
= $4,758.16
($4758 is closest)

3-5

= $1400 (F/P, 10%, 4) + $1,320 (F/P, 10%, 3) + $1,240 (F/P, 10%, 2) +


$1,160 (F/P, 10%, 1) + $1,080
= $2,049.74 + $1,756.92 + $1,500.40 + $1,276.00 + $1,080.00
= $7,663.06 or
F = P (F/P, 10%, 5)
($7660 is closest)

3-6

Q3

= $1400 (F/P, 10%, 2) + $1,320 (F/P, 10%, 1) + $1,240 +


$1,160 (P/F, 10%, 1) + $1,080 (P/F, 10%, 2)
= $1,694.00 + $1,452.00 + $1,240 + $1,054.55 + $892.56
($6157 is closest)
= $6,333.11 or
Q3 = P (F/P, 10%, 3)

3-7

We could calculate
and then use
or directly

Q6
Q10
Q10

= P (F/P,4%,6),
= Q6 (F/P, 4%, 4)
= P (F/P, 4%, 10)

where P = $70
where P = $70

(1)
(2)

Since P is given and Q6 is not, we can find Q10 directly by solving (2),
Q10
= $70 (1 + 0.04)10
= $103.62
($103 is closest)
3-8

Given: F = $125,000, n = 5 and i = 12% = 0.12


Solve for P using:

P = F/(1 + i)n

or

P = F (1 + i)-n

P = $125,000 (1 + 0.12)-5 = $125,000 (0.567427) = $70,928

($70,235 is closest)

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