Question

engnieering economy

Note: Show all of your work to arrive at a final result and for full credit. 1) If a person places $10,000 in an account that pays 10% compounded annually, how much money will be in the account after 10 years? 2) Three years ago a person borrowed $15,000 at an interest rate of 10% compounded annually and agreed to pay it back in equal payments over an 8 year period. This same person now wants to pay off the remaining amount of the loan. How much should this person pay? Assume that she has just made the 3rd payment. 3) A person deposits $20,000 into an account that pays 10% compounded yearly. How much money will be in the account after 15 years? 4) What is the accumulated amount resulting from a series of equal yearly deposits of $2,000 for 7 years if the interest rate is 8% per year compounded yearly? Assume that the first deposit is made 1 year from now. 5) What is the present value of a 15 year series of decreasing amounts if the interest rate is 5% compounded annually, the first year amount is $30,000 and the rate of decrease is $1,000 per year?

Answer 1

RE initially. The Amant deposited P = $ 10,000 R = 10% annually. t=10 To find Amount after By using formala. so year 10 A P ( 14 ) - 19000 CI+ slot) = 10,000 X C 1.1)' = 10,000 X 2-59374246 - 25937. 42.46 Hence Amount after 10 year's is $ 25937.4246425937.4