! Required information To retire at a decent age and move to Hawaii, an engineer plans to trust her account to an investment firm that promises to make a real ROR of 10% per year, after commissions and fees. Inflation has a historic rate of 4% per year and the account balance is currently $490,000. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. To retire in 13 years with no further deposits, determine the account balance in (future) dollars to realize a real 10% per year return. The account balance in (future) dollars to realize a real 10% per year return is $|

! Required information To retire at a decent age and move to Hawaii, an engineer plans to trust her account to an investment firm that promises to make a real ROR of 10% per year, after commissions and fees. Inflation has a historic rate of 4% per year and the account balance is currently $490,000. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. To retire in 13 years with no further deposits, determine the account balance in (future) dollars to realize a real 10% per year return. The account balance in (future) dollars to realize a real 10% per year return is $|

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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this is about Introduction to Decisions Under Certainty on engineering economics subject.. please show your solution. 1. At a time when the inflation rate is 6% per year, $100,000 fifteen years from now (thatis, inflated dollars) is the same as how many of today’s constant-value dollars?Given: F = $100,000 n = 15 years f = 6%
Assume the market interest rate is 8% per year and inflation averages 5% per year. calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for an income of $65,000 now and $5000 per year thereafter.
A father wants to save in advance for his eight-year-old daughter's collegeexpenses. The daughter will enter the college 10 years from now. An annualamount of $20,000 in today's dollars (constant dollars) will be required to support her college expenses for four years. Assume that these college payments will be made at the beginning of each school year. (The first payment occurs at the end of 10 years.) The future general inflation rate is estimated to be 5% per year, and the interest rate on the savings account will be 8% compounded quarterly (market interest rate) during this period. If the father has decided to save only $500 (actual dollars) each quarter, how much will the daughter have to borrow to cover her freshman expenses?(a) $1,920(b)$2,114(c) $2,210(d)$2,377
To convert actual (inflated) dollars to constant purchasing power dollars (where n = difference in time between today and purchasing base) that occur at the same point in time, one must: (a) Multiply by (P/F, inflation rate %, n). (b) Multiply by (F/P, inflation rate %, n). (c) Multiply by (P/F, combined rate %, n). (d) Divide by (P/F, real interest rate %, n).?
A ham radio operator wishes to borrow $160,000 to construct a world-class antenna system, transceiver, and amplifier at an electrically quiet location that can be accessed remotely and controlled via the Internet. Microphone, Morse code, radio teletype, slow-scan TV, and a host of other modes may be used for contesting, amassing DX awards, and chatting from anywhere in the world. She borrows the money at 8.5%. Annual inflation is 3.8%. Her combined MARR is 9%. The loan is to be paid back over 5 years. What is the amount to be paid at each year-end and the PW (using both then-current and constant-dollar approaches) if repayment follows: Plan 3 (make equal annual payments)?
A ham radio operator wishes to borrow $160,000 to construct a world-class antenna system, transceiver, and amplifier at an electrically quiet location that can be accessed remotely and controlled via the Internet. Microphone, Morse code, radio teletype, slow-scan TV, and a host of other modes may be used for contesting, amassing DX awards, and chatting from anywhere in the world. She borrows the money at 8.5%. Annual inflation is 3.8%. Her combined MARR is 9%. The loan is to be paid back over 5 years. What is the amount to be paid at each year-end and the PW (using both then-current and constant-dollar approaches) if repayment follows: Plan 1 (pay accumulated interest each year and principal at the end of the last year)? Plan 2 (make equal annual principal payments each year, plus interest on the unpaid balance)? Plan 3 (make equal annual payments)? Plan 4 (make a single payment of principal and interest at the end of the last year)?
An engineer planning for her son’s college education made deposits into a separate high-risk brokerage account every time she earned extra money from side consulting jobs. The deposits and their timings are as follows: Year Deposit, $ 0 5,000 3 8,000 4 9,000 7 15,000 11 16,000 17 20,000 (a) If the account increased at 15% per year and inflation averaged 3% per year over the entire period, what was the purchasing power of the money in the account in terms of year zero CV dollars immediately after the last deposit in year 17? (b) Use a spreadsheet to recalculate the purchasing power if the account actually earned 6% per year and inflation was higher than expected a 4% per year. Compare the purchasing power with the total amount deposited over the 17 years.
A barrel of oil has a current cost of $100/barrel. If general inflation is 2.5%/ year and oil has a real escalation rate of 5%/year, what will a barrel of oil cost in actual dollars five years from now?
Labor costs over a 4-year period have been forecast in thencurrent dollars as follows: $10,000, $12,000, $15,000, and $17,500. The general inflation rate for the 4 years is forecast to be 5%. Determine the constant-dollar labor costs for each of the 4 years.
Taki deposits P50,000 in a bank account at 6% compounded monthly for 5 years. If the inflation rateis 6.5% per year continues for this period. Will this effectively protect the purchasing power of theoriginal principal?
A father wants to save in advance for his eight-year-old daughter's college expenses. The daughter will enter the college 10 years from now. An annual amount of $20,000 in today's dollars (constant dollars) will be required to support her college expenses for four years. Assume that these college payments will be made at the beginning of each school year. (The first payment occurs at the end of 10 years.) The future general inflation rate is estimated to be 5% per year, and the interest rate on the savings account will be 8% compounded quarterly (market interest rate) during this period. If the father has decided to save only $500 (actual dollars) each quarter, how much will the daughter have to borrow to cover her freshman expenses? A. $2,683 B. $3,128 C. $2,377 D. $1,895
A machine cost $2,550 on January 1, 2014, and $3,930 on January 1, 2018. The average inflation rate over these four years was 7% per year. What is the true percentage increase in the cost of the machine from 2014 to 2018? (a) 14.95% (b) 54.12% (c) 7.00% (d) 17.58% (e) 35.11%.