Chapter 1 Engineering Economic Decisions 1.1) Not pr
ovided For The Wall Street Journal , go to the Front page to find the section on “What’s News.” This is a section on a brief summary on major headlines of the day’s news. Quickly browse through the news summary to see if there is any news related to business investment. The best places to f ind the major business news on investment are sections on “BUSINESS ”, “MARKETS” or “TECH .” 1.2) Not provided Som
e of the well -known business publications are: •Dail
y Newspapers:
oThe W
all Street Journal
oThe New York Times (Business Section)
oFinancial Times
•Wee
kly or Monthly Magazines:
oBus
inessWeek
oForbes
oMoney
oSmart Money
oFortune
Fundamentals of Engineering Economics, 4e Chan Park (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) Chapter 2: Time Value of Money 2.1) ( ) (0.06)($2,000)(5) $600I iP N= = = 2.2) •S
imple interest:
$20,000=$10
,000(1+0.075 N)
(1+0.075 N)=2
N=1
0.075=13.33≈14 years
•Compound i
nterest:
2.3) •Simple interest:
(0.10)($10,000)(5) $5,000 I iPN= = =
•Compound i
nterest:
[(1 ) 1] $10,000(1.6105 1) $6,105NIP i= + −= −=
2.4) •Opti
on 1: Compound interest with 8 .5%:
5$4,500(1 0.085) $4,500(1.5037) $6,766.65F= += = •Option 2
: Simple interest with 9 %: $4,500(1 0.09 5) $5,000(1.45) $6,525+ ×= = ∴ Option 1 is still better. $20,000=$10
,000(1+0.07)N
(1+0.07)N=2
N=10.24≈11years 2.5) •Compound interest:
5$1,000(1 0.065)
$1,370.09F= +=
•S
imple interest:
$1,000(1 0.068(5))
$1,340F= +=
T
he compound interest option is better. 2.6) End of Year Principal Repayment Interest payment Remaining Balance 0 $15,000.00 1 $4,620.50 $1,200.00 $10,379.50 2 $4,99 0.14 $830.36 $5,389.36 3 $5,389.35 $431.15 $0 2.7) $22,000( / ,5%,5) $22,000(0.7835) $17, 237.58P PF= = = 2.8) $30,000( / ,9%,3) $30,000(1.295) $38,850.87F FP= = =
2.9) $100( / ,10%,10) $200( / ,10%,8) $688F F P F P = + =
2.10) $250,000( / ,6%,10) $447,712F FP= = 2.11
) $300,000( / ,8%,10) $138,958P P F = = 2.12) 10.5%i= , two -year discount rate is 2(1 0.105) 1.221 (or 22.1%)+=
2.13) (
a) $5,000( / ,7%,5) $7,013F FP= = (b) $7, 250( / ,9%,15) $26, 408F FP= =
(
c) $9,000( / ,6%,33) $61,565F FP= =
(d) $12,000( / ,5.5%,8) $18, 416F FP= =
2.14) (
a) $25,500( / ,12%,8) $10, 299P PF= =
(b
) $58,000( / , 4%,12) $36, 227P PF= =
(
c) $25,000( / ,6%,9) $14,797P PF= =
(d
) $35,000( / ,9%, 4) $24,795P PF= =
2.15) (a) $12,000( / ,13%,4) $7,360P P F= = (b
) $30,000( / ,13%,5) $55, 273F F P= =
2.16) 3 (1 0.08)
log 3 log(1.08)
14.27 15 yearsNF PP
N
N= = +
=
= →
2.17) 2 (1 0.06)
log 2 log 1.06
11.896 years (or 12 years)NF PP
N
N= = +
==
2.18) • 2 (1 0.06)
log 2 log(1.06)
11.90 years 12 yearsNF PP
N
N= = +
=
=
•R
ule of 72: 12 years=
2.19) 394$1(1.08) $14,755,694,730,611F= =
ovided For The Wall Street Journal , go to the Front page to find the section on “What’s News.” This is a section on a brief summary on major headlines of the day’s news. Quickly browse through the news summary to see if there is any news related to business investment. The best places to f ind the major business news on investment are sections on “BUSINESS ”, “MARKETS” or “TECH .” 1.2) Not provided Som
e of the well -known business publications are: •Dail
y Newspapers:
oThe W
all Street Journal
oThe New York Times (Business Section)
oFinancial Times
•Wee
kly or Monthly Magazines:
oBus
inessWeek
oForbes
oMoney
oSmart Money
oFortune
Fundamentals of Engineering Economics, 4e Chan Park (Solutions Manual All Chapters, 100% Original Verified, A+ Grade) Chapter 2: Time Value of Money 2.1) ( ) (0.06)($2,000)(5) $600I iP N= = = 2.2) •S
imple interest:
$20,000=$10
,000(1+0.075 N)
(1+0.075 N)=2
N=1
0.075=13.33≈14 years
•Compound i
nterest:
2.3) •Simple interest:
(0.10)($10,000)(5) $5,000 I iPN= = =
•Compound i
nterest:
[(1 ) 1] $10,000(1.6105 1) $6,105NIP i= + −= −=
2.4) •Opti
on 1: Compound interest with 8 .5%:
5$4,500(1 0.085) $4,500(1.5037) $6,766.65F= += = •Option 2
: Simple interest with 9 %: $4,500(1 0.09 5) $5,000(1.45) $6,525+ ×= = ∴ Option 1 is still better. $20,000=$10
,000(1+0.07)N
(1+0.07)N=2
N=10.24≈11years 2.5) •Compound interest:
5$1,000(1 0.065)
$1,370.09F= +=
•S
imple interest:
$1,000(1 0.068(5))
$1,340F= +=
T
he compound interest option is better. 2.6) End of Year Principal Repayment Interest payment Remaining Balance 0 $15,000.00 1 $4,620.50 $1,200.00 $10,379.50 2 $4,99 0.14 $830.36 $5,389.36 3 $5,389.35 $431.15 $0 2.7) $22,000( / ,5%,5) $22,000(0.7835) $17, 237.58P PF= = = 2.8) $30,000( / ,9%,3) $30,000(1.295) $38,850.87F FP= = =
2.9) $100( / ,10%,10) $200( / ,10%,8) $688F F P F P = + =
2.10) $250,000( / ,6%,10) $447,712F FP= = 2.11
) $300,000( / ,8%,10) $138,958P P F = = 2.12) 10.5%i= , two -year discount rate is 2(1 0.105) 1.221 (or 22.1%)+=
2.13) (
a) $5,000( / ,7%,5) $7,013F FP= = (b) $7, 250( / ,9%,15) $26, 408F FP= =
(
c) $9,000( / ,6%,33) $61,565F FP= =
(d) $12,000( / ,5.5%,8) $18, 416F FP= =
2.14) (
a) $25,500( / ,12%,8) $10, 299P PF= =
(b
) $58,000( / , 4%,12) $36, 227P PF= =
(
c) $25,000( / ,6%,9) $14,797P PF= =
(d
) $35,000( / ,9%, 4) $24,795P PF= =
2.15) (a) $12,000( / ,13%,4) $7,360P P F= = (b
) $30,000( / ,13%,5) $55, 273F F P= =
2.16) 3 (1 0.08)
log 3 log(1.08)
14.27 15 yearsNF PP
N
N= = +
=
= →
2.17) 2 (1 0.06)
log 2 log 1.06
11.896 years (or 12 years)NF PP
N
N= = +
==
2.18) • 2 (1 0.06)
log 2 log(1.06)
11.90 years 12 yearsNF PP
N
N= = +
=
=
•R
ule of 72: 12 years=
2.19) 394$1(1.08) $14,755,694,730,611F= =
