Engineering Economy

academic year interest rate of 3.76 percent would pay a 5,032 dollars interest over 10 years,

Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.

| |finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per |

8. Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest. Or, she can open an account at The South Bank and earn 5.39 percent interest, compounded monthly. If Karen decides to invest at The North Bank, she will:

What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

1) Establish the principal and interest amount of the monthly payment. Using the 30 year loan principal and interest amount of the payment is $1,150.92

10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?

c) The present value of $500 to be received in one year when the opportunity cost rate is 8 percent (discounting):

Interest earned now can be found from getting the difference between the principal and amount.

2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much

At an interest rate of 15% per year (3.75% for three months, the amount to borrow equals

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

Natalie’s grandmother has decided to charge interest of 6% on the note payable extended on November 16. The loan plus interest is to be repaid in 24 months. (Assume that half a month of interest accrued during November.)

(Compound value solving for I) at what annual rate would the following have to be investe

     Most People have money in a savings account and wonder how to figure out the actual interest rates or the APR (annual percentage yield). To find the amount of interest you would use this formula: P (principle) x R (rate) x T (time) = I (interest)