REMAh. ——— ae Ans: B = pean i-1; r=0.1384 = 13, (1+1/12)2-1= (1 + 0.14/4) 84%, 7 p=P,+P, SOLUTION 10-27 P=P3+Py - os A Present worth, P = F/ (1+) 100 100 +10 __ - Pis2.97 Pe e008 ” +008) = - oa SOLUTION 10 - 28 Net present Worth, P = Por7mn - 600 > 0 Ans: A. 70 600 >0 (isi)! 7/6>1+iori <16.7% Therefore; for P > 0,0 Si<16.7% SOLUTION 10-29 Future worth of P2000 for 6 years at 8% Ans: C New capital after 6 years = Lump sum due after 2 years at 8% Ps 5173.75(1 + 0.08)? = 6034.66 SOLUTION 10 - 30 Ans: D F=P(1+i)" = 10000 + 0.08) = P1360.50 AREUTION 10-31 P(L+i)" = 20000 (1 +9, 08)’ = P34,276.48 SOLUTION 10 - 32 vi an 32 The future wort th F of an amount P at an interest Tate i for n periods is: F=Pasiy where i= 0115/1,» =), 1= 3P= PA + 0.115) 1115t= 3 log (1.115) = log (3) log (1.115) = log (3); t= 10,09 years The future Worth of p compounded contin’ F=Pon SOLUTION 10 - 33 Ans: 9,000 x etv.05\a0) F= Pla 918.95 ee. 3173.75 + 2000 = 5173 75 fand F = 3P (triple) L at a nominal interest rate 1 tinuously for ¢ Years is:2 Part 7 a Vol. 2 Engineering Economics 315 i N10 the amount required is P = (1+i)" Where F = P2,000, i = 0.06 and n = 6-1=5. ‘ 2,000 P= —~—__ = P 1,494.52 (1+0.06)° ee ON 10-35 ‘The future worth of P5000 for 10 years is: F=P(.+iy" F = 5000(1 + 0.08/4)!% = P11,040.2 ‘The compound interest is: 1 = F - P= P11,040.2 - P5,000 = P6,040.2 MON 10-36 The conditions in the problem is shown in the cash flow o diagram below. ° 16 Fy=P(1+i)" Fe= 1000(1 + 0.05)* I Fx=P1477.455 P= 1000 a Ps= Fs- 1000 08 ier Too Px = PA77.455 Fis Fis= Po(1 +i" Fy = 477 455(1 + 0.05)8 = P705.42 “amon 10-37 The amount F to be paid at the end of one year is P80,000 ° The total principal amount P is P80,000 - P11,200 = 68,800.00 F=P(Q+i)" 80,000 = 68,800(1 + i)! 1.1628 =1+i i = 0.1628 = 16.28% “Ton 10-38, Setting 20 years ago as present time, then; F= P(1 + ijt; = 202) = 40, i= 1/2 3000 = 1500(1 + i)" i= 0.0174 = 1/2 = 0.0349 = 3.49% “no; SsCON10-39 The future worth of P at an interest rate of r compounded continuously for # years is given by the formula F = Pet, where ¢ = 2.71828... F = 5000 x e010Hy Mathomtt You 7000(1 + 0.15)° = P4,626.00 : P(1+i)" = 4500(1 + 0.145) = P13,294.02 ture worth of all funds (on the fourth year) F = 50000(1+0.2)$ + 40000(1+0.2)* + 30000140 +20000(1+0.2)! F = P240,000.00 {ditional amount needed = 250,000 - 240,000 Iditional amount needed = P10,000.00 ture worth of P10,000 without inflation: F=10000(1 + 0.15)° = P20,113.57 esent worth of P20,113.57 considering 6% inflation P = 20113.57/(1 + 0.06)5 = P15,030.03 ture worth of P10,000: F = 10000(1 + 0.12)° = P17,623.42 esent worth of P17,623.42 considering 3% inflation te: P=17,623.42/(1 + 0.03)> = P15,202.11 fit = 15,202.11 - 10,000 = P5,202.11 p= (14026) -1=0.16 = 16% R= (1 +0.16/4)'-1=0.1698 = 16.98% Wo nominal rates are equal if their effective rates qual EReemiannaty = ERouate (1 +0.12/2)2-1 = ey/4y- 1 (+025; 1.064 x = 0.1183 = 11.83% Reemanuay = ER, 1+012/2)2-1 1+0, Pea E “(le ee =O01171= Hae” “(uty m Nominal Tate, r= 9.5%, effective rate = 984%