Question

4:09 1 OK. 73% INDE232-HOMEWORK1 - Read-only Read Only - You can't save changes to this file. V INDE232 ENGINEERING ECONOMICS STUDY QUESTIONS- HOMEWORK 1 1. How much should be put in an investment with a 10% effective annual rate today to have $10,000 in five years? 2. A person wishes to have a future sum of 100,000 US Dollars for his son's education after 8 years from now. What is the single-payment that he should deposit now so that he gets the desired amount after 8 years? The bank gives 15% interest rate compounded annually 3. A person who is now 35 years old is planning for his retired life. He plans Invest an equal sum of 10,000 US Dollars at the end of every year for the next 25 years starting from the end of the next year. The bank gives 20% interest rate, compounded annually. Find the maturity value of his account when he is 60 years old 4. A company has to replace a present facility after 15 years at an outlay of 500,000 US Dollars. It plans to deposit an equal amount at the end of every year for the next 15 years at an interest rate of 18% compounded annually. Find the equivalent amount that must be deposited at the end of every year for the next 15 years 5. A company wants to set up a reserve which will help the company to have an annual equivalent amount of 10,00,000 US Dollars for the next 20 years towards its employees welfare measures. The reserve is assumed to grow at the rate of 15% annually. Find the single payment that must be made now as the reserve amount 6. A bank gives a loan to a company to purchase an equipment worth 10,00,000 US Dollars at an interest rate of 18% compounded annually This amount should be repaid in 15 yearly equal installments. Find the installment amount that the company has to pay to the bank 7. A person is planning for his retired life. He has 10 more years of service. He would like to deposit 20% of his salary, which is 4,000 US Dollars at the end of the first year, and thereafter he wishes to deposit the amount with an annual increase of Rs 500 for the next 9 years with an interest rate of 15%. Find the total amount at the end of the 10th year of the above series III T

Answer 1

1) Amount required = $10000

Time = 5 years

Rate = 10% per annum = 0.1

So, the amount that should be invested today =

Let the amount to be invested be X

So,

X * (1 + 0.1)⁵ = 10000

X = 10000 / 1.1⁵

X = $6209.21

Please send the other questions separately.