Faculty of Engineering & Petroleum

CHEMICAL ENGINEERING DEPARTMENT

Second Semester 2013-2014

Kuwait University

Prof. Taher Al-Sahhaf

Engineering Economy (ENG 209)

HOMEWORK#3
Due: 20/3/2014

(1) A geometrically increasing series of payment starts at the end of first year with $3000 and increasing at 7% per year for 11 years at an interest rate of 10% annually. What is the present alue of this series!

(") #or the attached cash flow determine the alue of the first payment and payment num$er (10) for the attached geometric series. %he payment increasing at &% per year to year 1" at an interest rate of 1"% annually.

A1

0 1 " 3 ' & ( 7 ) * 10 11 1"

10000

(3) +n the cash flow diagram show $elow, the two e-ual deposits (.) at n / 0, and n / 1 are used to pro ide payments which start at the end of the fourth year at a alue of 01 700. %he payments increase annually at a rate of 1&%. %he interest rate is 10% per year. 2alculate alue of ..

1 " 3 ' & ( 7 1' 1& 1( 17 years

(') What is the present alue of the following geometrically series of payments!

(a) A first year $ase of $*,000 decreasing $y 11% per year to year 10 with an interest rate of 1)%.

($) A first year $ase of $1&,000 increasing at 10% per year to year * with an interest rate of 1"%.

** Notes : 1raw the cash flow diagram for each pro$lem.

3 3 3 All quizzes are OPEN BOOK only (No Notes allowed.) Borrowing calculators & books is not allowed during Please sub"it your #$ on A% &a&er. uizzes and E!a"s ti"es.