Engineering Economy (16th Edition) - Standalone book
16th Edition
ISBN: 9780133439274
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 5, Problem 44P
To purchase a used automobile, you borrow $10,000 from Loan Shark Enterprises. They tell you the interest rate is 1% per month for 35 months. They also charge you $200 for a credit investigation, so you leave with $9,800 in your pocket. The monthly payment they calculated for you is
If you agree to these terms and sign their contract, what is the actual APR (annual percentage rate) that you are paying? (5.6)
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A large automobile manufacturer has developed a continuous variable transmission (CVT) that provides smooth shifting and enhances fuel efficiency by 2 mpg of gasoline. The extra cost of a CVT is $800 on the sticker price of a new car. For a particular model averaging 28 miles per gallon with the CVT, what is the cost of gasoline (dollars per gallon) that makes this option affordable when the buyer’s interest rate is 10% per year? The car will be driven 100,000 miles uniformly over an eight-year period.
If P8,000 is deposited in the bank each year for 10 years, how much annuity can a person get annually from the bank every year for 6 years starting 1 year after the 10th deposit is made. cost of money is 12%.
A student plans to deposit P1, 500 in a bank now and another P3, 000 for the next two years. If he plans to withdraw P5, 000 three years after his deposit for the purpose of buying shoes. What will be the amount of money left in the bank one year after his withdrawal? Effective rate is 10%. Include a cash flow diagram on your solution.
Chapter 5 Solutions
Engineering Economy (16th Edition) - Standalone book
Ch. 5.A - Use the ERR method with = 8% per year to solve for...Ch. 5.A - Apply the ERR method with = 12% per year to the...Ch. 5.A - Are there multiple IRRs for the following...Ch. 5.A - Are there multiple IRRs for the following cash...Ch. 5 - Tennessee Tool Works (TTW) is considering...Ch. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - A large induced-draft fan is needed for an...
Ch. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Prob. 16PCh. 5 - Prob. 17PCh. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Determine the FW of the following engineering...Ch. 5 - Prob. 22PCh. 5 - Fill in Table P5-23 below when P = 10,000, S = 2,...Ch. 5 - Prob. 24PCh. 5 - A simple, direct space heating system is currently...Ch. 5 - Prob. 26PCh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Stan Moneymaker has been informed of a major...Ch. 5 - Prob. 34PCh. 5 - Prob. 35PCh. 5 - Prob. 36PCh. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - To purchase a used automobile, you borrow 10,000...Ch. 5 - Your boss has just presented you with the summary...Ch. 5 - Experts agree that the IRR of a college education...Ch. 5 - A company has the opportunity to take over a...Ch. 5 - The prospective exploration for oil in the outer...Ch. 5 - Prob. 49PCh. 5 - An integrated, combined cycle power plant produces...Ch. 5 - A computer call center is going to replace all of...Ch. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 58PCh. 5 - Prob. 59PCh. 5 - a. Calculate the IRR for each of the three...Ch. 5 - Prob. 61PCh. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Prob. 64SECh. 5 - Prob. 65SECh. 5 - Prob. 66SECh. 5 - A certain medical device will result in an...Ch. 5 - Refer to Problem 5-61. Develop a spreadsheet to...Ch. 5 - Prob. 69CSCh. 5 - Prob. 70CSCh. 5 - Suppose that the average utilization of the CVD...Ch. 5 - Prob. 72FECh. 5 - Prob. 73FECh. 5 - Prob. 74FECh. 5 - Prob. 75FECh. 5 - Prob. 76FECh. 5 - Prob. 77FECh. 5 - Prob. 78FECh. 5 - Prob. 79FECh. 5 - A new machine was bought for 9,000 with life of...Ch. 5 - Prob. 81FECh. 5 - Prob. 82FECh. 5 - Prob. 83FECh. 5 - Refer to Problem 5-2. Assuming the residual value...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- A student plans to deposit P1,500 in the bank now and another P3,000 for the next two years. If he plans to withdraw P5,000 three years from after his last deposit for the purpose of buying shoes, what will be the amount of money left in the bank after one year of his withdrawal? The effective annual rate of interest is 10%.arrow_forwardABC Corporation will be making a $100,000 payment and a collection of the same amount. The buying spot rate for a USD is P52.10 and the selling spot rate is P52.35. By matching the collection and the payment, ABC was able to make cost savings of how much?arrow_forwardIt costs $27,000 to retrofit the gasoline pumps at a certain filling station so the pumps can dispense E85 fuel (85% ethanol and 15% gasoline). If the station makes a profit of $0.08 per gallon from selling E85 and sells an average of 23,000 gallons of E85 per month, how many months will it take for the owner to recoup her $27,000 investment in the retrofitted pumps? The interest rate is 2% per month. It will take ___ months to recoup the investment.arrow_forward
- A sum of P5,000 is invested now and left for eight years, at which time the principal is withdrawn. The interest that has accrued is left for another eight years. If the effective interest rate is 5%, what will be the withdrawal amount at the end of the 16th year?arrow_forwardAutomobiles of the future will most likely be manufactured largely with carbon fibers made from recycled plastics, wood pulp, and cellulose. Replacing half the ferrous metals in current automobiles could reduce a vehicle’s weight by 60% and fuel consumption by 30%. One impediment to using carbon fibers in cars is cost. If the justification for the extra sticker price of carbon-fiber cars is solely based on fuel savings, how much extra sticker price can be justified over a six-year life span if the carbon-fiber car would average 39 miles per gallon of gasoline compared to a conventional car averaging 30 miles per gallon? Assume that gasoline costs $4.00 per gallon, the interest rate is 20% per year, and 117,000 miles are driven uniformly over six years.arrow_forwardDetermine the ordinary simple interest on P10,000.00 for 9 months and 10 days if the rate of interest is 12%.arrow_forward
- What is the annual interest rate if P265 is earned in four months on an investment of P15000??arrow_forwardThe equivalent amount of money that can be spent seven years from now in lieu of spending $50,000 now at an interest rate 18% per year is closest to:a. $15,700b. $159,300c. $199,300d. $259,100arrow_forwardQ4. RKE & Associates is considering the purchase of a building it currently leases for $30,000 per year. The owner of the building put it up for sale at a price of $170,000, but because the firm has been a good tenant, the owner offered to sell it to RKE for a cash price of $160,000 now. If purchased now, how long will it be before the company recovers its investment at an interest rate of 15% per year?arrow_forward
- Your parents make 20 equal annual deposits of $2,000 each into a bank account earning 3% interest per year. The first deposit will be made one year from today. How much money can be withdrawn from this account immediately after the 20th deposit?arrow_forwardA fund is to be donated by wealthy man to provide scholarships to deserving students. The fund will grant P6,000 for each semiannual of the first five years, P9000 for each quarter of the next five years, and P11,000 each month thereafter. The scholarship will start one semiannual after the fund is established. If the fund earns 8% per year compounded bimonthly, what is the amount of the donation?arrow_forwardSince your first birthday, your grandparents have been depositing $110 into a savings account every month. The account pays 12% interest annually. Immediately after your grandparents make the deposit on your 18th birthday, the amount of money in your savings account will be closest to ________.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education
What is Efficiency?; Author: Marketing Business Network;https://www.youtube.com/watch?v=HtyE1V6jXek;License: Standard Youtube License