EBK BASICS OF ENGINEERING ECONOMY
EBK BASICS OF ENGINEERING ECONOMY
2nd Edition
ISBN: 9780100255050
Author: Blank
Publisher: YUZU
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Chapter 1, Problem 14P

When an interest rate statement does not include a time period, e.g., 3%, the time period is assumed to be what?

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During recessionary periods, bonds that were issued many years ago have a higher coupon rate than currently issued bonds. Therefore, they may sell at a premium, a price higher than their face value, because of currently low coupon rates. A $50,000 bond that was issued 15 years ago is for sale for $60,000. What rate of return per year will a purchaser make if the bond coupon rate is 14% per year, payable annually, and the bond is due 5 years from now? Write the ROR equation and use a single-cell spreadsheet function to display the correct answer directly.
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A plaintiff in a successful lawsuit was awarded a judgment of $4800 per month for 5 years. The plaintiff has the need of a fairly large sum of money immediately for an investment of his own, and has offered the defendant the opportunity to pay off the award in a lump-sum amount of $110,000. If the defendant accepts the offer and pays the $110,000 now, what rate of return will the defendant have made by not paying the 60 monthly amounts?

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EBK BASICS OF ENGINEERING ECONOMY

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