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610 HWset 2dfgndfgn
610 HWset 2dfgndfgn
Chapter 2, Solution 1.
1. (F/P,8%25) = 6.8485
2. (P/A,3%,8) = 7.0197
3. (P/G,9%,20) = 61.7770
4. (F/A,15%,18) = 75.8364
5. (A/P,30%,15) = 0.30598
Chapter2,Problem3.
Chapter 2, Solution 3.
F = 200,000(F/P,10%,3)
= 200,000(1.3310)
= $266,200
Chapter 2, Problem 6.
Thompson Mechanical Products is planning
to set aside $150,000 now for possibly
replacing its large synchronous refiner motors
whenever it becomes necessary. If the
replacement isnt needed for 7 years, how
much will the company have in its investment
set-aside account if it achieves a rate of return
of 18% per year?
Chapter 2, Solution 6.
F = 150,000(F/P,18%,7)
= 150,000(3.1855)
= $477,825
Chapter2,Problem10.
F = 65,000(F/P,4%,5)
= 65,000(1.2167)
= $79,086
P = (280,000-90,000)
(P/A,10%,5)
= 190,000(3.7908)
= $720,252
Chapter 2, Solution 27
A = [4 + 0.5(A/G,16%,5)] [1
0.1(A/G,16%,5)
= [4 + 0.5(1.7060)] [1 0.1(1.7060)]
= $4,023,600
or; find the PW of inflows and Outflows then
calculate corresponding A as I demonstrated this
solution method in class
For
g = i,
P = 60,000(0.1)[15/(1 + 0.04)]
= $86,538
Chapter2,Problem47.
Chapter2,Problem49.
Chapter2,Problem52.
An investment of $600,000
increased to $1,000,000 over a 5year period. What was the rate of
return on the investment?
1,000,000 = 600,000(F/P,i,5)
(F/P,i,5) = 1.6667
i = 10.8% (Excel)
85,000 = 30,000(P/A,i,5) +
15,000(P/G,i,5)
Solve for i by trial and error or
spreadsheet:
i = 50%
(Excel)
Chapter2,Problem58.
2,000,000 = 100,000(P/A,4%,n)
(P/A,4%,n) = 20.000
From 4% table, n is between 40 and
45 years; by spreadsheet, 42 > n >
41
Therefore, n = 41 years
Chapter2,Problem61.
Chapter2,Problem61.
10A = A(F/A,10%,n)
(F/A,10%,n) = 10.000
From 10% table, n is between 7 and
8 years; therefore, n = 8 years
160 = 235(P/F,i,5)
(P/F,i,5) =0.6809
From tables, i = 8%
Answer is (c)
Chapter2,Problem67.
109.355 = 7(P/A,i,25)
(P/A,i,25) = 15.6221
From tables, i = 4%
Answer is (a)
Chapter2,Problem70.
An engineer deposits $8000 in year 1, $8500
in year 2, and amounts increasing by $500 per
year through year 10. At an interest rate of
10% per year, the present worth in year 0 is
closest to
(a) $60,600
(b) $98,300
(c) $157,200
(d) $173,400
P = 8000(P/A,10%,10) +
500(P/G,10%,10)
= 8000(6.1446) + 500(22.8913)
= $60,602.45
Answer is (a)
Chapter2,Problem77.
A = 100,000(A/F,12%,3)
= 100,000(0.29635)
= $29,635
Answer is (c)
Chapter2,Problem78.
A civil engineer deposits $10,000 per year
into a retirement account that achieves a rate
of return of 12% per year. The amount of
money in the account at the end of 25 years is
closest to
(a) $670,500
(b) $902,800
(c) $1,180,900
(d) $1,333,300
A = 10,000(F/A,12%,25)
= 10,000(133.3339)
= $1,333,339
Answer is (d)
Chapter2,Problem80.
Maintenance costs for a regenerative thermal
oxidizer have been increasing uniformly for 5
years. If the cost in year 1 was $8000 and it
increased by $900 per year through year 5, the
present worth of the costs at an interest rate of
10% per year is closest to
(a) $31,670
(b) $33,520
(c) $34,140
(d) Over $36,000
P = 8,000(P/A,10%,5) +
900(P/G,10%,5)
= 8,000(3.7908) + 900(6.8618)
= $36,502
Answer is (d)