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Ce303 HW1 PDF

This document contains 10 questions related to engineering economy and financial calculations. The questions cover topics such as simple and compound interest, present and future value, rates of return, and cash flow diagrams. Readers are asked to calculate interest earned on loans and savings accounts over various time periods and interest rates. They are also asked to determine equivalent interest rates in investments, time to quadruple an investment, and future worth of cash flows.

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196 views2 pages

Ce303 HW1 PDF

This document contains 10 questions related to engineering economy and financial calculations. The questions cover topics such as simple and compound interest, present and future value, rates of return, and cash flow diagrams. Readers are asked to calculate interest earned on loans and savings accounts over various time periods and interest rates. They are also asked to determine equivalent interest rates in investments, time to quadruple an investment, and future worth of cash flows.

Uploaded by

البرت آينشتاين
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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JORDAN UNIVERSITY OF SCIENCE AND TECHNOLOGY

Civil Engineering Department


CE 303:Engineering Economy
Home Work #1

Question 1:
What lump-sum amount of interest will be paid on a $10,000 loan that was made on August 1, 2012,
and repaid on November 1, 2016, with ordinary simple interest at 10% per year?
Question 2:
What is the present equivalent of $18,000 to be received in 15 years when the interest rate is 7% per
year?
Question 3:
The price of oil in 2005 was $67 per barrel. “This price is still lower than the price of oil in 1981”
says a government publication. If inflation has averaged 3.2% per year from 1981 to 2005, what was
the price per barrel of oil in 1981?
Question 4:
How long does it take (to the nearest whole year) for $1,000 to quadruple in value when the interest
rate is 15% per year?
Question 5:
Your neighbor offers (‫ )عرض‬you an investment opportunity which will pay a single lump sum of
$2000 five years from today. The investment requires a single payment of $1500 today. What is the
annual rate of return as % (interest rate) on this investment?
Question 6:
What is the present value of the second cash flow diagram that makes the future value of both
diagrams the same?
Question 7:
f $100,000 is deposited today in a saving account for 5 years, answer the following four questions: (5
marks)
a- If the bank pays a simple interest at the rate of 4% per year, what is the total interest earned?
b- If the bank pays a compound interest at the rate of 4% per year, compounded annually. And all of
the money is allowed to accumulate, what is the total interest earned?
c- What is the reason for the difference between the two calculated values in parts a and b?
d- If the bank pays interest at the rate of 4% per year, compounded annually. And the interest
earned on the money is withdrawn at the end of each year, how much money will be in the
account by the end of 5 years?
Question 8:
If $14,000 is deposited today in a saving account that pays interest at the rate of 8% per year,
compounded annually for 7 years, and then the accumulated money is invested at a simple interest
rate of 10% for four years after the end of the seven years what is the total interest amount earned at
the end of this 11 year-investment?
Question 9:
For the following CFD find the value of X that makes the future worth of the two cash flow diagrams
equivalent ( use i=12% per year):

Question 10:
A certain company is going to invest $100,000 in a bank account for three years at a simple interest
rate of 12% per year. Immediately after the end of the third year, the manager will switch to another
account with a 10% interest rate compounded annually for 5 years. What is the expected future
worth of the invested money after the whole investment period?

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