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Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 1
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 1 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2550 now and will need an upgrade at the end of two years, which you expect to be $1750. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 75.4 b) Diff = 69.6 c) Diff = 63.8 d) Diff = 58
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 8.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 9%? Show the difference between the two effective interest rates.
a) Diff = -11.67E-05 b) Diff = -10.7E-05 c) Diff = -9.73E-05 d) Diff = -8.75E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 6% compounded weekly and checking account interest at 7.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 6.3654%, 7.9962% b) Effective interest rates = 6.3036%, 7.9185% c) Effective interest rates = 6.2418%, 7.8409% d) Effective interest rates = 6.18%, 7.7633%
4. Problem 04
Tom has a bank deposit now worth $806.25. A year ago, it was $760. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.5083% b) The nominal monthly interest rate = 0.5034% c) The nominal monthly interest rate = 0.4984% d) The nominal monthly interest rate = 0.4935%
5. Problem 05
Mary has 2100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2240.63 b) 2240.63 c) 2240.63 d) 2240.34
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €120000 for it. If she waits for one year, she will likely get more, say, €130000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 1% per year, compounded monthly (II) 4% per year, compounded semiannually (III) 5% per year, compounded continuously
a) (I) 832.12 months, (II) 210.02 months, (III) 166.36 months b) (I) 416.23 months, (II) 168.43 months, (III) 138.63 months c) (I) 277.61 months, (II) 140.7 months, (III) 118.83 months d) (I) 208.29 months, (II) 120.89 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 3%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 3% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 1% in the first year, 3% in the second, and 7% in the third. Did you lose out by having locked into the 3% investment? If so, by how much?
a) I = 2661.29, Lost = 60.15 b) I = 2742.1, Lost = 60.2 c) I = 2582.93, Lost = 60.1 d) I = 2506.93, Lost = 60.05
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 4525.5 b) 4148.4 c) 3771.3 d) 3394.2
10. Problem 10
Clarence bought a flat for $80000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2000 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 41.6 months b) 37.4 months c) 33.2 months
d) 29.1 months 11. Problem 11
Clarence paid off an $85000 mortgage completely in 48 months. He paid $2200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 19.3701% b) 17.7559% c) 16.1417% d) 14.5276%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $1000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 624.47 b) 567.7 c) 510.93 d) 454.16
13. Problem 13 A bond with a face value of S1000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 624.47 b) 567.7 c) 510.93 d) 454.16
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1100, and the deal you are offered is the following: You pay $1210 ($1100 plus $110 interest) in 11 equal $110 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $11 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.3641%, APR = 52.3693%, "Effective Yearly Rate = 65.4516% b) Monthly Rate = 3.9674%, APR = 47.6084%, "Effective Yearly Rate = 59.5015% c) Monthly Rate = 3.5706%, APR = 42.8476%, "Effective Yearly Rate = 53.5513% d) Monthly Rate = 3.1739%, APR = 38.0867%, "Effective Yearly Rate = 47.6012%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 2
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 2 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2600 now and will need an upgrade at the end of two years, which you expect to be $1800. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 78.4 b) Diff = 71.8 c) Diff = 65.3 d) Diff = 58.8
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 9.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 10%? Show the difference between the two effective interest rates.
a) Diff = -11.45E-05 b) Diff = -10.49E-05 c) Diff = -9.54E-05 d) Diff = -8.58E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 6.5% compounded weekly and checking account interest at 8% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 6.7787%, 8.383% b) Effective interest rates = 6.7116%, 8.3% c) Effective interest rates = 6.6445%, 8.217% d) Effective interest rates = 6.5773%, 8.134%
4. Problem 04
Tom has a bank deposit now worth $816.25. A year ago, it was $770. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4921% b) The nominal monthly interest rate = 0.4873% c) The nominal monthly interest rate = 0.4824% d) The nominal monthly interest rate = 0.4775%
5. Problem 05
Mary has 2200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2340.63 b) 2340.36 c) 2328.65 d) 2316.95
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €130000 for it. If she waits for one year, she will likely get more, say, €140000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 2% per year, compounded monthly (II) 5% per year, compounded semiannually (III) 6% per year, compounded continuously
a) (I) 416.23 months, (II) 168.43 months, (III) 138.63 months b) (I) 277.61 months, (II) 140.7 months, (III) 118.83 months c) (I) 208.29 months, (II) 120.89 months, (III) 103.97 months d) (I) 166.7 months, (II) 106.04 months, (III) 92.42 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 4%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 4% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 2% in the first year, 4% in the second, and 8% in the third. Did you lose out by having locked into the 4% investment? If so, by how much?
a) I = 2582.93, Lost = 60.1 b) I = 2661.29, Lost = 60.15 c) I = 2506.93, Lost = 60.05 d) I = 2433.24, Lost = 60
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 4929.9 b) 4436.9 c) 3943.9 d) 3450.9
10. Problem 10
Clarence bought a flat for $90000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2100 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 59.8 months b) 55.2 months c) 50.6 months
d) 46 months 11. Problem 11
Clarence paid off an $90000 mortgage completely in 48 months. He paid $2400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 17.7129% b) 15.9416% c) 14.1703% d) 12.399%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $2000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 1422.67 b) 1304.11 c) 1185.56 d) 1067
13. Problem 13 A bond with a face value of S2000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 1422.67 b) 1304.11 c) 1185.56 d) 1067
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1200, and the deal you are offered is the following: You pay $1320 ($1200 plus $120 interest) in 11 equal $120 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $12 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.6984%, APR = 56.3804%, "Effective Yearly Rate = 70.2547% b) Monthly Rate = 4.3068%, APR = 51.682%, "Effective Yearly Rate = 64.4002% c) Monthly Rate = 3.9153%, APR = 46.9837%, "Effective Yearly Rate = 58.5456% d) Monthly Rate = 3.5238%, APR = 42.2853%, "Effective Yearly Rate = 52.691%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 3
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 3 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2650 now and will need an upgrade at the end of two years, which you expect to be $1850. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 87.2 b) Diff = 80 c) Diff = 72.7 d) Diff = 65.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 10.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 11%? Show the difference between the two effective interest rates.
a) Diff = -9.31E-05 b) Diff = -8.38E-05 c) Diff = -7.45E-05 d) Diff = -6.52E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 7% compounded weekly and checking account interest at 8.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 7.4631%, 9.1043% b) Effective interest rates = 7.3907%, 9.0159% c) Effective interest rates = 7.3182%, 8.9275% d) Effective interest rates = 7.2458%, 8.8391%
4. Problem 04
Tom has a bank deposit now worth $826.25. A year ago, it was $780. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.486% b) The nominal monthly interest rate = 0.4812% c) The nominal monthly interest rate = 0.4764% d) The nominal monthly interest rate = 0.4716%
5. Problem 05
Mary has 2300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2440.63 b) 2440.37 c) 2428.17 d) 2415.97
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €140000 for it. If she waits for one year, she will likely get more, say, €151000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 3% per year, compounded monthly (II) 6% per year, compounded semiannually (III) 7% per year, compounded continuously
a) (I) 277.61 months, (II) 140.7 months, (III) 118.83 months b) (I) 208.29 months, (II) 120.89 months, (III) 103.97 months c) (I) 166.7 months, (II) 106.04 months, (III) 92.42 months d) (I) 138.98 months, (II) 94.48 months, (III) 83.18 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 5%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 5% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 3% in the first year, 5% in the second, and 9% in the third. Did you lose out by having locked into the 5% investment? If so, by how much?
a) I = 2506.93, Lost = 60.05 b) I = 2582.93, Lost = 60.1 c) I = 2433.24, Lost = 60 d) I = 2361.76, Lost = 59.95
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 6225.7 b) 5659.8 c) 5093.8 d) 4527.8
10. Problem 10
Clarence bought a flat for $100000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2200 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 50.2 months b) 45.2 months c) 40.2 months
d) 35.2 months 11. Problem 11
Clarence paid off an $95000 mortgage completely in 48 months. He paid $2600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 19.1115% b) 17.2003% c) 15.2892% d) 13.378%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $3000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 1847.07 b) 1662.36 c) 1477.65 d) 1292.95
13. Problem 13 A bond with a face value of S3000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 1847.07 b) 1662.36 c) 1477.65 d) 1292.95
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1300, and the deal you are offered is the following: You pay $1430 ($1300 plus $130 interest) in 11 equal $130 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $13 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.8711%, APR = 46.4531%, "Effective Yearly Rate = 57.738% b) Monthly Rate = 3.484%, APR = 41.8078%, "Effective Yearly Rate = 51.9642% c) Monthly Rate = 3.0969%, APR = 37.1624%, "Effective Yearly Rate = 46.1904% d) Monthly Rate = 2.7098%, APR = 32.5171%, "Effective Yearly Rate = 40.4166%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 4
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 4 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2700 now and will need an upgrade at the end of two years, which you expect to be $1900. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 80.1 b) Diff = 72.1 c) Diff = 64.1 d) Diff = 56.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 11.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 12%? Show the difference between the two effective interest rates.
a) Diff = -10.86E-05 b) Diff = -9.96E-05 c) Diff = -9.05E-05 d) Diff = -8.15E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 7.5% compounded weekly and checking account interest at 9% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 7.7826%, 9.3807% b) Effective interest rates = 7.7048%, 9.2869% c) Effective interest rates = 7.6269%, 9.1931% d) Effective interest rates = 7.5491%, 9.0993%
4. Problem 04
Tom has a bank deposit now worth $836.25. A year ago, it was $790. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4752% b) The nominal monthly interest rate = 0.4705% c) The nominal monthly interest rate = 0.4657% d) The nominal monthly interest rate = 0.461%
5. Problem 05
Mary has 2400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2540.39 b) 2527.69 c) 2514.98 d) 2502.28
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €150000 for it. If she waits for one year, she will likely get more, say, €162000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 4% per year, compounded monthly (II) 7% per year, compounded semiannually (III) 8% per year, compounded continuously
a) (I) 208.29 months, (II) 120.89 months, (III) 103.97 months b) (I) 166.7 months, (II) 106.04 months, (III) 92.42 months c) (I) 138.98 months, (II) 94.48 months, (III) 83.18 months d) (I) 119.17 months, (II) 85.24 months, (III) 75.62 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 6%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 6% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 4% in the first year, 6% in the second, and 10% in the third. Did you lose out by having locked into the 6% investment? If so, by how much?
a) I = 2433.24, Lost = 60 b) I = 2506.93, Lost = 60.05 c) I = 2361.76, Lost = 59.95 d) I = 2292.45, Lost = 59.9
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 7198.3 b) 6598.5 c) 5998.6 d) 5398.7
10. Problem 10
Clarence bought a flat for $110000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2300 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 59.6 months b) 54.2 months c) 48.8 months
d) 43.4 months 11. Problem 11
Clarence paid off an $100000 mortgage completely in 48 months. He paid $2800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 20.3649% b) 18.3284% c) 16.2919% d) 14.2554%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $4000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 3055.95 b) 2801.29 c) 2546.63 d) 2291.96
13. Problem 13 A bond with a face value of S4000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 3055.95 b) 2801.29 c) 2546.63 d) 2291.96
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1400, and the deal you are offered is the following: You pay $1540 ($1400 plus $140 interest) in 11 equal $140 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $14 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5997%, APR = 55.1962%, "Effective Yearly Rate = 68.4558% b) Monthly Rate = 4.2164%, APR = 50.5965%, "Effective Yearly Rate = 62.7512% c) Monthly Rate = 3.8331%, APR = 45.9968%, "Effective Yearly Rate = 57.0465% d) Monthly Rate = 3.4498%, APR = 41.3972%, "Effective Yearly Rate = 51.3419%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 5
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 5 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2750 now and will need an upgrade at the end of two years, which you expect to be $1950. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 96.1 b) Diff = 87.4 c) Diff = 78.7 d) Diff = 69.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 12.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 13%? Show the difference between the two effective interest rates.
a) Diff = -11.38E-05 b) Diff = -10.5E-05 c) Diff = -9.63E-05 d) Diff = -8.75E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 8% compounded weekly and checking account interest at 9.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 8.4053%, 10.024% b) Effective interest rates = 8.322%, 9.9248% c) Effective interest rates = 8.2388%, 9.8255% d) Effective interest rates = 8.1556%, 9.7263%
4. Problem 04
Tom has a bank deposit now worth $846.25. A year ago, it was $800. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4788% b) The nominal monthly interest rate = 0.4742% c) The nominal monthly interest rate = 0.4695% d) The nominal monthly interest rate = 0.4648%
5. Problem 05
Mary has 2500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2640.63 b) 2640.63 c) 2640.4 d) 2627.2
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €160000 for it. If she waits for one year, she will likely get more, say, €173000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 5% per year, compounded monthly (II) 8% per year, compounded semiannually (III) 9% per year, compounded continuously
a) (I) 166.7 months, (II) 106.04 months, (III) 92.42 months b) (I) 138.98 months, (II) 94.48 months, (III) 83.18 months c) (I) 119.17 months, (II) 85.24 months, (III) 75.62 months d) (I) 104.32 months, (II) 77.68 months, (III) 69.31 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 7%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 7% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 5% in the first year, 7% in the second, and 11% in the third. Did you lose out by having locked into the 7% investment? If so, by how much?
a) I = 2361.76, Lost = 59.95 b) I = 2433.24, Lost = 60 c) I = 2292.45, Lost = 59.9 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 5981 b) 5382.9 c) 4784.8 d) 4186.7
10. Problem 10
Clarence bought a flat for $120000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2400 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 58 months b) 52.2 months c) 46.4 months
d) 40.6 months 11. Problem 11
Clarence paid off an $105000 mortgage completely in 48 months. He paid $3000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 25.7924% b) 23.643% c) 21.4936% d) 19.3443%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $5000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 3279.4 b) 2951.46 c) 2623.52 d) 2295.58
13. Problem 13 A bond with a face value of S5000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 3279.4 b) 2951.46 c) 2623.52 d) 2295.58
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1500, and the deal you are offered is the following: You pay $1650 ($1500 plus $150 interest) in 11 equal $150 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $15 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.8%, APR = 45.6004%, "Effective Yearly Rate = 56.4479% b) Monthly Rate = 3.42%, APR = 41.0403%, "Effective Yearly Rate = 50.8031% c) Monthly Rate = 3.04%, APR = 36.4803%, "Effective Yearly Rate = 45.1583% d) Monthly Rate = 2.66%, APR = 31.9203%, "Effective Yearly Rate = 39.5135%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 6
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 6 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2800 now and will need an upgrade at the end of two years, which you expect to be $2000. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 94.8 b) Diff = 85.3 c) Diff = 75.8 d) Diff = 66.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 13.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 14%? Show the difference between the two effective interest rates.
a) Diff = -10.94E-05 b) Diff = -10.1E-05 c) Diff = -9.26E-05 d) Diff = -8.41E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 8.5% compounded weekly and checking account interest at 10% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 8.9528%, 10.576% b) Effective interest rates = 8.8642%, 10.4713% c) Effective interest rates = 8.7755%, 10.3666% d) Effective interest rates = 8.6869%, 10.2619%
4. Problem 04
Tom has a bank deposit now worth $856.25. A year ago, it was $810. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4638% b) The nominal monthly interest rate = 0.4592% c) The nominal monthly interest rate = 0.4545% d) The nominal monthly interest rate = 0.4499%
5. Problem 05
Mary has 2600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2740.41 b) 2726.71 c) 2713.01 d) 2699.31
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €170000 for it. If she waits for one year, she will likely get more, say, €184000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 6% per year, compounded monthly (II) 9% per year, compounded semiannually (III) 10% per year, compounded continuously
a) (I) 138.98 months, (II) 94.48 months, (III) 83.18 months b) (I) 119.17 months, (II) 85.24 months, (III) 75.62 months c) (I) 104.32 months, (II) 77.68 months, (III) 69.31 months d) (I) 92.77 months, (II) 71.37 months, (III) 63.98 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 8%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 8% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 6% in the first year, 8% in the second, and 12% in the third. Did you lose out by having locked into the 8% investment? If so, by how much?
a) I = 2292.45, Lost = 59.9 b) I = 2361.76, Lost = 59.95 c) I = 2225.22, Lost = 59.85 d) I = 2160.02, Lost = 59.8
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 6766.6 b) 6202.7 c) 5638.8 d) 5074.9
10. Problem 10
Clarence bought a flat for $130000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2500 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 80 months b) 73.9 months c) 67.7 months
d) 61.6 months 11. Problem 11
Clarence paid off an $110000 mortgage completely in 48 months. He paid $3200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 29.267% b) 27.0157% c) 24.7643% d) 22.513%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $6000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 4849.44 b) 4445.32 c) 4041.2 d) 3637.08
13. Problem 13 A bond with a face value of S6000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 4849.44 b) 4445.32 c) 4041.2 d) 3637.08
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1600, and the deal you are offered is the following: You pay $1760 ($1600 plus $160 interest) in 11 equal $160 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $16 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5253%, APR = 54.3032%, "Effective Yearly Rate = 67.1095% b) Monthly Rate = 4.1482%, APR = 49.7779%, "Effective Yearly Rate = 61.5171% c) Monthly Rate = 3.7711%, APR = 45.2526%, "Effective Yearly Rate = 55.9246% d) Monthly Rate = 3.3939%, APR = 40.7274%, "Effective Yearly Rate = 50.3321%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 7
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 7 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2850 now and will need an upgrade at the end of two years, which you expect to be $2050. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 112.4 b) Diff = 102.2 c) Diff = 92 d) Diff = 81.8
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 14.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 15%? Show the difference between the two effective interest rates.
a) Diff = -9.65E-05 b) Diff = -8.84E-05 c) Diff = -8.04E-05 d) Diff = -7.23E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 9% compounded weekly and checking account interest at 10.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 9.6912%, 11.351% b) Effective interest rates = 9.5971%, 11.2408% c) Effective interest rates = 9.503%, 11.1305% d) Effective interest rates = 9.4089%, 11.0203%
4. Problem 04
Tom has a bank deposit now worth $866.25. A year ago, it was $820. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4583% b) The nominal monthly interest rate = 0.4537% c) The nominal monthly interest rate = 0.4491% d) The nominal monthly interest rate = 0.4445%
5. Problem 05
Mary has 2700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2840.43 b) 2826.22 c) 2812.02 d) 2797.82
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €180000 for it. If she waits for one year, she will likely get more, say, €195000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 7% per year, compounded monthly (II) 10% per year, compounded semiannually (III) 11% per year, compounded continuously
a) (I) 119.17 months, (II) 85.24 months, (III) 75.62 months b) (I) 104.32 months, (II) 77.68 months, (III) 69.31 months c) (I) 92.77 months, (II) 71.37 months, (III) 63.98 months d) (I) 83.52 months, (II) 66.04 months, (III) 59.41 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 9%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 9% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 7% in the first year, 9% in the second, and 13% in the third. Did you lose out by having locked into the 9% investment? If so, by how much?
a) I = 2225.22, Lost = 59.85 b) I = 2292.45, Lost = 59.9 c) I = 2160.02, Lost = 59.8 d) I = 2096.77, Lost = 59.75
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 6501.6 b) 6001.4 c) 5501.3 d) 5001.2
10. Problem 10
Clarence bought a flat for $140000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2600 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 64.9 months b) 58.5 months c) 52 months
d) 45.5 months 11. Problem 11
Clarence paid off an $115000 mortgage completely in 48 months. He paid $3400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 23.4477% b) 21.1029% c) 18.7581% d) 16.4134%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $7000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 4828.42 b) 4345.58 c) 3862.73 d) 3379.89
13. Problem 13 A bond with a face value of S7000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 4828.42 b) 4345.58 c) 3862.73 d) 3379.89
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1700, and the deal you are offered is the following: You pay $1870 ($1700 plus $170 interest) in 11 equal $170 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $17 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.7454%, APR = 44.9452%, "Effective Yearly Rate = 55.4633% b) Monthly Rate = 3.3709%, APR = 40.4507%, "Effective Yearly Rate = 49.9169% c) Monthly Rate = 2.9963%, APR = 35.9561%, "Effective Yearly Rate = 44.3706% d) Monthly Rate = 2.6218%, APR = 31.4616%, "Effective Yearly Rate = 38.8243%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 8
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 8 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2900 now and will need an upgrade at the end of two years, which you expect to be $2100. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 120.5 b) Diff = 109.5 c) Diff = 98.6 d) Diff = 87.6
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 15.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 16%? Show the difference between the two effective interest rates.
a) Diff = -9.14E-05 b) Diff = -8.38E-05 c) Diff = -7.62E-05 d) Diff = -6.86E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 9.5% compounded weekly and checking account interest at 11% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 9.9564%, 11.5719% b) Effective interest rates = 9.8568%, 11.4562% c) Effective interest rates = 9.7572%, 11.3404% d) Effective interest rates = 9.6577%, 11.2247%
4. Problem 04
Tom has a bank deposit now worth $876.25. A year ago, it was $830. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4574% b) The nominal monthly interest rate = 0.4529% c) The nominal monthly interest rate = 0.4484% d) The nominal monthly interest rate = 0.4438%
5. Problem 05
Mary has 2800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 2940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 2940.63 b) 2940.44 c) 2925.73 d) 2911.03
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €190000 for it. If she waits for one year, she will likely get more, say, €206000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 8% per year, compounded monthly (II) 11% per year, compounded semiannually (III) 12% per year, compounded continuously
a) (I) 104.32 months, (II) 77.68 months, (III) 69.31 months b) (I) 92.77 months, (II) 71.37 months, (III) 63.98 months c) (I) 83.52 months, (II) 66.04 months, (III) 59.41 months d) (I) 75.96 months, (II) 61.47 months, (III) 55.45 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 10%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 10% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 8% in the first year, 10% in the second, and 14% in the third. Did you lose out by having locked into the 10% investment? If so, by how much?
a) I = 2160.02, Lost = 59.8 b) I = 2225.22, Lost = 59.85 c) I = 2096.77, Lost = 59.75 d) I = 2035.44, Lost = 59.7
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 4504.4 b) 4095 c) 3685.5 d) 3276
10. Problem 10
Clarence bought a flat for $150000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2700 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 88.6 months b) 81.8 months c) 75 months
d) 68.2 months 11. Problem 11
Clarence paid off an $120000 mortgage completely in 48 months. He paid $3600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 31.5892% b) 29.1592% c) 26.7293% d) 24.2994%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $8000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 6201.72 b) 5637.92 c) 5074.13 d) 4510.34
13. Problem 13 A bond with a face value of S8000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 6201.72 b) 5637.92 c) 5074.13 d) 4510.34
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1800, and the deal you are offered is the following: You pay $1980 ($1800 plus $180 interest) in 11 equal $180 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $18 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.0949%, APR = 49.1385%, "Effective Yearly Rate = 60.5588% b) Monthly Rate = 3.7226%, APR = 44.6714%, "Effective Yearly Rate = 55.0535% c) Monthly Rate = 3.3504%, APR = 40.2042%, "Effective Yearly Rate = 49.5481% d) Monthly Rate = 2.9781%, APR = 35.7371%, "Effective Yearly Rate = 44.0428%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 9
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 9 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $4900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $2950 now and will need an upgrade at the end of two years, which you expect to be $2150. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 140.3 b) Diff = 128.6 c) Diff = 116.9 d) Diff = 105.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 16.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 17%? Show the difference between the two effective interest rates.
a) Diff = -9.31E-05 b) Diff = -8.59E-05 c) Diff = -7.88E-05 d) Diff = -7.16E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 10% compounded weekly and checking account interest at 11.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 10.6115%, 12.2472% b) Effective interest rates = 10.5065%, 12.1259% c) Effective interest rates = 10.4014%, 12.0047% d) Effective interest rates = 10.2963%, 11.8834%
4. Problem 04
Tom has a bank deposit now worth $886.25. A year ago, it was $840. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4566% b) The nominal monthly interest rate = 0.4521% c) The nominal monthly interest rate = 0.4476% d) The nominal monthly interest rate = 0.4432%
5. Problem 05
Mary has 2900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3040.63 b) 3040.63 c) 3040.45 d) 3025.24
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €200000 for it. If she waits for one year, she will likely get more, say, €217000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 9% per year, compounded monthly (II) 12% per year, compounded semiannually (III) 13% per year, compounded continuously
a) (I) 92.77 months, (II) 71.37 months, (III) 63.98 months b) (I) 83.52 months, (II) 66.04 months, (III) 59.41 months c) (I) 75.96 months, (II) 61.47 months, (III) 55.45 months d) (I) 69.66 months, (II) 57.51 months, (III) 51.99 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 11%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 11% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 9% in the first year, 11% in the second, and 15% in the third. Did you lose out by having locked into the 11% investment? If so, by how much?
a) I = 2096.77, Lost = 59.75 b) I = 2160.02, Lost = 59.8 c) I = 2035.44, Lost = 59.7 d) I = 1975.94, Lost = 59.65
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 16% compounded monthly, how much money is being lent?
a) 3533.6 b) 3239.1 c) 2944.6 d) 2650.2
10. Problem 10
Clarence bought a flat for $160000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2800 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 92.6 months b) 85.5 months c) 78.4 months
d) 71.3 months 11. Problem 11
Clarence paid off an $125000 mortgage completely in 48 months. He paid $3800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 32.6039% b) 30.0959% c) 27.5879% d) 25.0799%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $9000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 8407.1 b) 7760.4 c) 7113.7 d) 6467
13. Problem 13 A bond with a face value of S9000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 8407.1 b) 7760.4 c) 7113.7 d) 6467
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $1900, and the deal you are offered is the following: You pay $2090 ($1900 plus $190 interest) in 11 equal $190 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $19 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.8128%, APR = 57.7538%, "Effective Yearly Rate = 71.0931% b) Monthly Rate = 4.4426%, APR = 53.3112%, "Effective Yearly Rate = 65.6244% c) Monthly Rate = 4.0724%, APR = 48.8686%, "Effective Yearly Rate = 60.1557% d) Monthly Rate = 3.7022%, APR = 44.426%, "Effective Yearly Rate = 54.687%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 10
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 10 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3000 now and will need an upgrade at the end of two years, which you expect to be $2200. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 149.2 b) Diff = 136.7 c) Diff = 124.3 d) Diff = 111.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 17.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 18%? Show the difference between the two effective interest rates.
a) Diff = -7.33E-05 b) Diff = -6.66E-05 c) Diff = -5.99E-05 d) Diff = -5.33E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 10.5% compounded weekly and checking account interest at 12% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 11.3911%, 13.063% b) Effective interest rates = 11.2805%, 12.9362% c) Effective interest rates = 11.1699%, 12.8093% d) Effective interest rates = 11.0593%, 12.6825%
4. Problem 04
Tom has a bank deposit now worth $896.25. A year ago, it was $850. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4469% b) The nominal monthly interest rate = 0.4425% c) The nominal monthly interest rate = 0.4381% d) The nominal monthly interest rate = 0.4337%
5. Problem 05
Mary has 3000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3140.63 b) 3140.46 c) 3124.75 d) 3109.05
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €210000 for it. If she waits for one year, she will likely get more, say, €228000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 10% per year, compounded monthly (II) 13% per year, compounded semiannually (III) 14% per year, compounded continuously
a) (I) 83.52 months, (II) 66.04 months, (III) 59.41 months b) (I) 75.96 months, (II) 61.47 months, (III) 55.45 months c) (I) 69.66 months, (II) 57.51 months, (III) 51.99 months d) (I) 64.33 months, (II) 54.04 months, (III) 48.93 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 12%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 12% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 10% in the first year, 12% in the second, and 16% in the third. Did you lose out by having locked into the 12% investment? If so, by how much?
a) I = 2035.44, Lost = 59.7 b) I = 2096.77, Lost = 59.75 c) I = 1975.94, Lost = 59.65 d) I = 1918.23, Lost = 59.6
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 4938.3 b) 4558.4 c) 4178.5 d) 3798.7
10. Problem 10
Clarence bought a flat for $170000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $2900 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 96.5 months b) 89 months c) 81.6 months
d) 74.2 months 11. Problem 11
Clarence paid off an $130000 mortgage completely in 48 months. He paid $4000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 30.9622% b) 28.382% c) 25.8018% d) 23.2216%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $10000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 5676.99 b) 5109.29 c) 4541.59 d) 3973.89
13. Problem 13 A bond with a face value of S10000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 5676.99 b) 5109.29 c) 4541.59 d) 3973.89
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2000, and the deal you are offered is the following: You pay $2200 ($2000 plus $200 interest) in 11 equal $200 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $20 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.6837%, APR = 44.2048%, "Effective Yearly Rate = 54.3575% b) Monthly Rate = 3.3154%, APR = 39.7843%, "Effective Yearly Rate = 48.9217% c) Monthly Rate = 2.947%, APR = 35.3639%, "Effective Yearly Rate = 43.486% d) Monthly Rate = 2.5786%, APR = 30.9434%, "Effective Yearly Rate = 38.0502%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 11
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 11 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3050 now and will need an upgrade at the end of two years, which you expect to be $2250. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 171.2 b) Diff = 158 c) Diff = 144.9 d) Diff = 131.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 18.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 19%? Show the difference between the two effective interest rates.
a) Diff = -7.95E-05 b) Diff = -7.34E-05 c) Diff = -6.73E-05 d) Diff = -6.11E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 11% compounded weekly and checking account interest at 12.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 11.9633%, 13.6389% b) Effective interest rates = 11.8471%, 13.5064% c) Effective interest rates = 11.731%, 13.374% d) Effective interest rates = 11.6148%, 13.2416%
4. Problem 04
Tom has a bank deposit now worth $906.25. A year ago, it was $860. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4375% b) The nominal monthly interest rate = 0.4331% c) The nominal monthly interest rate = 0.4287% d) The nominal monthly interest rate = 0.4244%
5. Problem 05
Mary has 3100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3240.46 b) 3224.26 c) 3208.06 d) 3191.86
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €220000 for it. If she waits for one year, she will likely get more, say, €239000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 11% per year, compounded monthly (II) 14% per year, compounded semiannually (III) 15% per year, compounded continuously
a) (I) 75.96 months, (II) 61.47 months, (III) 55.45 months b) (I) 69.66 months, (II) 57.51 months, (III) 51.99 months c) (I) 64.33 months, (II) 54.04 months, (III) 48.93 months d) (I) 59.76 months, (II) 50.98 months, (III) 46.21 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 13%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 13% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 11% in the first year, 13% in the second, and 17% in the third. Did you lose out by having locked into the 13% investment? If so, by how much?
a) I = 1975.94, Lost = 59.65 b) I = 2035.44, Lost = 59.7 c) I = 1918.23, Lost = 59.6 d) I = 1862.25, Lost = 59.55
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 4985.1 b) 4486.6 c) 3988.1 d) 3489.6
10. Problem 10
Clarence bought a flat for $180000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3000 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 77 months b) 69.3 months c) 61.6 months
d) 53.9 months 11. Problem 11
Clarence paid off an $135000 mortgage completely in 48 months. He paid $4200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 31.7476% b) 29.102% c) 26.4564% d) 23.8107%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $11000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 7824.67 b) 7172.61 c) 6520.56 d) 5868.5
13. Problem 13 A bond with a face value of S11000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 7824.67 b) 7172.61 c) 6520.56 d) 5868.5
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2100, and the deal you are offered is the following: You pay $2310 ($2100 plus $210 interest) in 11 equal $210 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $21 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4004%, APR = 52.8053%, "Effective Yearly Rate = 64.8713% b) Monthly Rate = 4.0337%, APR = 48.4049%, "Effective Yearly Rate = 59.4654% c) Monthly Rate = 3.667%, APR = 44.0044%, "Effective Yearly Rate = 54.0594% d) Monthly Rate = 3.3003%, APR = 39.604%, "Effective Yearly Rate = 48.6535%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 12
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 12 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3100 now and will need an upgrade at the end of two years, which you expect to be $2300. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 180.7 b) Diff = 166.8 c) Diff = 152.9 d) Diff = 139
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 19.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 20%? Show the difference between the two effective interest rates.
a) Diff = -6.63E-05 b) Diff = -6.08E-05 c) Diff = -5.52E-05 d) Diff = -4.97E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 11.5% compounded weekly and checking account interest at 13% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 12.1731%, 13.8032% b) Effective interest rates = 12.0514%, 13.6652% c) Effective interest rates = 11.9296%, 13.5272% d) Effective interest rates = 11.8079%, 13.3892%
4. Problem 04
Tom has a bank deposit now worth $916.25. A year ago, it was $870. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4412% b) The nominal monthly interest rate = 0.4369% c) The nominal monthly interest rate = 0.4326% d) The nominal monthly interest rate = 0.4282%
5. Problem 05
Mary has 3200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3340.63 b) 3340.63 c) 3340.47 d) 3323.77
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €230000 for it. If she waits for one year, she will likely get more, say, €250000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 12% per year, compounded monthly (II) 15% per year, compounded semiannually (III) 16% per year, compounded continuously
a) (I) 69.66 months, (II) 57.51 months, (III) 51.99 months b) (I) 64.33 months, (II) 54.04 months, (III) 48.93 months c) (I) 59.76 months, (II) 50.98 months, (III) 46.21 months d) (I) 55.8 months, (II) 48.26 months, (III) 43.78 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 14%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 14% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 12% in the first year, 14% in the second, and 18% in the third. Did you lose out by having locked into the 14% investment? If so, by how much?
a) I = 1918.23, Lost = 59.6 b) I = 1975.94, Lost = 59.65 c) I = 1862.25, Lost = 59.55 d) I = 2742.1, Lost = 60.2
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 6319.6 b) 5745.1 c) 5170.6 d) 4596.1
10. Problem 10
Clarence bought a flat for $190000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3100 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 87.7 months b) 79.7 months c) 71.7 months
d) 63.8 months 11. Problem 11
Clarence paid off an $140000 mortgage completely in 48 months. He paid $4400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 27.0836% b) 24.3752% c) 21.6669% d) 18.9585%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $12000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 9604.74 b) 8865.92 c) 8127.09 d) 7388.26
13. Problem 13 A bond with a face value of S12000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 9604.74 b) 8865.92 c) 8127.09 d) 7388.26
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2200, and the deal you are offered is the following: You pay $2420 ($2200 plus $220 interest) in 11 equal $220 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $22 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.7474%, APR = 56.9687%, "Effective Yearly Rate = 69.9252% b) Monthly Rate = 4.3822%, APR = 52.5865%, "Effective Yearly Rate = 64.5463% c) Monthly Rate = 4.017%, APR = 48.2043%, "Effective Yearly Rate = 59.1675% d) Monthly Rate = 3.6518%, APR = 43.8221%, "Effective Yearly Rate = 53.7886%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 13
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 13 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3150 now and will need an upgrade at the end of two years, which you expect to be $2350. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 190.3 b) Diff = 175.7 c) Diff = 161 d) Diff = 146.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 20.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 21%? Show the difference between the two effective interest rates.
a) Diff = -4.89E-05 b) Diff = -4.4E-05 c) Diff = -3.91E-05 d) Diff = -3.42E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 12% compounded weekly and checking account interest at 13.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 12.8614%, 14.5111% b) Effective interest rates = 12.7341%, 14.3674% c) Effective interest rates = 12.6068%, 14.2238% d) Effective interest rates = 12.4794%, 14.0801%
4. Problem 04
Tom has a bank deposit now worth $926.25. A year ago, it was $880. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4278% b) The nominal monthly interest rate = 0.4235% c) The nominal monthly interest rate = 0.4192% d) The nominal monthly interest rate = 0.4149%
5. Problem 05
Mary has 3300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3440.48 b) 3423.28 c) 3406.08 d) 3388.87
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €240000 for it. If she waits for one year, she will likely get more, say, €260000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 13% per year, compounded monthly (II) 16% per year, compounded semiannually (III) 17% per year, compounded continuously
a) (I) 64.33 months, (II) 54.04 months, (III) 48.93 months b) (I) 59.76 months, (II) 50.98 months, (III) 46.21 months c) (I) 55.8 months, (II) 48.26 months, (III) 43.78 months d) (I) 52.33 months, (II) 45.83 months, (III) 41.59 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 15%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 15% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 13% in the first year, 15% in the second, and 19% in the third. Did you lose out by having locked into the 15% investment? If so, by how much?
a) I = 1862.25, Lost = 59.55 b) I = 1918.23, Lost = 59.6 c) I = 2742.1, Lost = 60.2 d) I = 2661.29, Lost = 60.15
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 6111.8 b) 5500.6 c) 4889.4 d) 4278.2
10. Problem 10
Clarence bought a flat for $200000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3200 per month at 10% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 98.7 months b) 90.5 months c) 82.3 months
d) 74 months 11. Problem 11
Clarence paid off an $145000 mortgage completely in 48 months. He paid $4600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 33.192% b) 30.426% c) 27.66% d) 24.894%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $13000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 10759.49 b) 9931.84 c) 9104.19 d) 8276.53
13. Problem 13 A bond with a face value of S13000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 10759.49 b) 9931.84 c) 9104.19 d) 8276.53
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2300, and the deal you are offered is the following: You pay $2530 ($2300 plus $230 interest) in 11 equal $230 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $23 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.7293%, APR = 56.752%, "Effective Yearly Rate = 69.6039% b) Monthly Rate = 4.3655%, APR = 52.3864%, "Effective Yearly Rate = 64.2497% c) Monthly Rate = 4.0017%, APR = 48.0209%, "Effective Yearly Rate = 58.8956% d) Monthly Rate = 3.6379%, APR = 43.6554%, "Effective Yearly Rate = 53.5415%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 14
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 14 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3200 now and will need an upgrade at the end of two years, which you expect to be $2400. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 199.9 b) Diff = 184.6 c) Diff = 169.2 d) Diff = 153.8
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 21.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 22%? Show the difference between the two effective interest rates.
a) Diff = -4.2E-05 b) Diff = -3.78E-05 c) Diff = -3.36E-05 d) Diff = -2.94E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 12.5% compounded weekly and checking account interest at 14% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 13.6968%, 15.3822% b) Effective interest rates = 13.5638%, 15.2329% c) Effective interest rates = 13.4308%, 15.0835% d) Effective interest rates = 13.2978%, 14.9342%
4. Problem 04
Tom has a bank deposit now worth $936.25. A year ago, it was $890. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4231% b) The nominal monthly interest rate = 0.4188% c) The nominal monthly interest rate = 0.4146% d) The nominal monthly interest rate = 0.4104%
5. Problem 05
Mary has 3400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3540.49 b) 3522.79 c) 3505.08 d) 3487.38
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €250000 for it. If she waits for one year, she will likely get more, say, €270000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 14% per year, compounded monthly (II) 17% per year, compounded semiannually (III) 18% per year, compounded continuously
a) (I) 59.76 months, (II) 50.98 months, (III) 46.21 months b) (I) 55.8 months, (II) 48.26 months, (III) 43.78 months c) (I) 52.33 months, (II) 45.83 months, (III) 41.59 months d) (I) 49.27 months, (II) 43.64 months, (III) 39.61 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 16%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 16% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 14% in the first year, 16% in the second, and 20% in the third. Did you lose out by having locked into the 16% investment? If so, by how much?
a) I = 2742.1, Lost = 60.2 b) I = 1862.25, Lost = 59.55 c) I = 2661.29, Lost = 60.15 d) I = 2582.93, Lost = 60.1
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 6116.1 b) 5504.5 c) 4892.9 d) 4281.3
10. Problem 10
Clarence bought a flat for $210000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3300 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 93.5 months b) 85.7 months c) 77.9 months
d) 70.1 months 11. Problem 11
Clarence paid off an $150000 mortgage completely in 48 months. He paid $4800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 33.8298% b) 31.0107% c) 28.1915% d) 25.3724%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $14000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 11937 b) 11018.77 c) 10100.54 d) 9182.31
13. Problem 13 A bond with a face value of S14000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 11937 b) 11018.77 c) 10100.54 d) 9182.31
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2400, and the deal you are offered is the following: You pay $2640 ($2400 plus $240 interest) in 11 equal $240 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $24 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.7128%, APR = 56.5531%, "Effective Yearly Rate = 69.3095% b) Monthly Rate = 4.3502%, APR = 52.2029%, "Effective Yearly Rate = 63.978% c) Monthly Rate = 3.9877%, APR = 47.8526%, "Effective Yearly Rate = 58.6465% d) Monthly Rate = 3.6252%, APR = 43.5024%, "Effective Yearly Rate = 53.315%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 15
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 15 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3250 now and will need an upgrade at the end of two years, which you expect to be $2450. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 161.1 b) Diff = 145 c) Diff = 128.9 d) Diff = 112.8
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 22.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 23%? Show the difference between the two effective interest rates.
a) Diff = -3.47E-05 b) Diff = -3.12E-05 c) Diff = -2.78E-05 d) Diff = -2.43E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 13% compounded weekly and checking account interest at 14.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 14.1417%, 15.8136% b) Effective interest rates = 14.003%, 15.6586% c) Effective interest rates = 13.8644%, 15.5035% d) Effective interest rates = 13.7257%, 15.3485%
4. Problem 04
Tom has a bank deposit now worth $946.25. A year ago, it was $900. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4227% b) The nominal monthly interest rate = 0.4185% c) The nominal monthly interest rate = 0.4143% d) The nominal monthly interest rate = 0.4101%
5. Problem 05
Mary has 3500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3640.63 b) 3640.49 c) 3622.29 d) 3604.09
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €260000 for it. If she waits for one year, she will likely get more, say, €281000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 15% per year, compounded monthly (II) 18% per year, compounded semiannually (III) 19% per year, compounded continuously
a) (I) 55.8 months, (II) 48.26 months, (III) 43.78 months b) (I) 52.33 months, (II) 45.83 months, (III) 41.59 months c) (I) 49.27 months, (II) 43.64 months, (III) 39.61 months d) (I) 46.56 months, (II) 41.65 months, (III) 37.81 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 3%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 3% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 1% in the first year, 3% in the second, and 7% in the third. Did you lose out by having locked into the 3% investment? If so, by how much?
a) I = 2661.29, Lost = 60.15 b) I = 2742.1, Lost = 60.2 c) I = 2582.93, Lost = 60.1 d) I = 2506.93, Lost = 60.05
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 6944.1 b) 6365.5 c) 5786.8 d) 5208.1
10. Problem 10
Clarence bought a flat for $220000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3400 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 103.8 months b) 95.8 months c) 87.8 months
d) 79.9 months 11. Problem 11
Clarence paid off an $155000 mortgage completely in 48 months. He paid $5000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 34.4327% b) 31.5633% c) 28.6939% d) 25.8246%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $15000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 10103 b) 9092.7 c) 8082.4 d) 7072.1
13. Problem 13 A bond with a face value of S15000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 10103 b) 9092.7 c) 8082.4 d) 7072.1
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2500, and the deal you are offered is the following: You pay $2750 ($2500 plus $250 interest) in 11 equal $250 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $25 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.6135%, APR = 43.3616%, "Effective Yearly Rate = 53.1067% b) Monthly Rate = 3.2521%, APR = 39.0254%, "Effective Yearly Rate = 47.796% c) Monthly Rate = 2.8908%, APR = 34.6892%, "Effective Yearly Rate = 42.4854% d) Monthly Rate = 2.5294%, APR = 30.3531%, "Effective Yearly Rate = 37.1747%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 16
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 16 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3300 now and will need an upgrade at the end of two years, which you expect to be $2500. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 168.5 b) Diff = 151.7 c) Diff = 134.8 d) Diff = 118
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 23.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 24%? Show the difference between the two effective interest rates.
a) Diff = -2.69E-05 b) Diff = -2.42E-05 c) Diff = -2.15E-05 d) Diff = -1.88E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 13.5% compounded weekly and checking account interest at 15% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 14.578%, 16.2362% b) Effective interest rates = 14.4337%, 16.0755% c) Effective interest rates = 14.2893%, 15.9147% d) Effective interest rates = 14.145%, 15.7539%
4. Problem 04
Tom has a bank deposit now worth $956.25. A year ago, it was $910. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4181% b) The nominal monthly interest rate = 0.414% c) The nominal monthly interest rate = 0.4098% d) The nominal monthly interest rate = 0.4057%
5. Problem 05
Mary has 3600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3740.63 b) 3740.5 c) 3721.8 d) 3703.1
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €270000 for it. If she waits for one year, she will likely get more, say, €292000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 16% per year, compounded monthly (II) 19% per year, compounded semiannually (III) 20% per year, compounded continuously
a) (I) 52.33 months, (II) 45.83 months, (III) 41.59 months b) (I) 49.27 months, (II) 43.64 months, (III) 39.61 months c) (I) 46.56 months, (II) 41.65 months, (III) 37.81 months d) (I) 44.12 months, (II) 39.85 months, (III) 36.16 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 4%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 4% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 2% in the first year, 4% in the second, and 8% in the third. Did you lose out by having locked into the 4% investment? If so, by how much?
a) I = 2582.93, Lost = 60.1 b) I = 2661.29, Lost = 60.15 c) I = 2506.93, Lost = 60.05 d) I = 2433.24, Lost = 60
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 5665.4 b) 5150.3 c) 4635.3 d) 4120.3
10. Problem 10
Clarence bought a flat for $230000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3500 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 98.1 months b) 89.9 months c) 81.7 months
d) 73.6 months 11. Problem 11
Clarence paid off an $160000 mortgage completely in 48 months. He paid $5200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 34.9965% b) 32.0802% c) 29.1638% d) 26.2474%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $16000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 13243.66 b) 12140.02 c) 11036.38 d) 9932.75
13. Problem 13 A bond with a face value of S16000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 13243.66 b) 12140.02 c) 11036.38 d) 9932.75
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2600, and the deal you are offered is the following: You pay $2860 ($2600 plus $260 interest) in 11 equal $260 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $26 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.3231%, APR = 51.8777%, "Effective Yearly Rate = 63.4974% b) Monthly Rate = 3.9629%, APR = 47.5546%, "Effective Yearly Rate = 58.206% c) Monthly Rate = 3.6026%, APR = 43.2314%, "Effective Yearly Rate = 52.9145% d) Monthly Rate = 3.2424%, APR = 38.9083%, "Effective Yearly Rate = 47.6231%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 17
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 17 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3350 now and will need an upgrade at the end of two years, which you expect to be $2550. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 193.5 b) Diff = 175.9 c) Diff = 158.3 d) Diff = 140.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 24.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 25%? Show the difference between the two effective interest rates.
a) Diff = -1.85E-05 b) Diff = -1.67E-05 c) Diff = -1.48E-05 d) Diff = -1.3E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 14% compounded weekly and checking account interest at 15.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 15.3059%, 16.983% b) Effective interest rates = 15.1558%, 16.8165% c) Effective interest rates = 15.0057%, 16.65% d) Effective interest rates = 14.8557%, 16.4835%
4. Problem 04
Tom has a bank deposit now worth $966.25. A year ago, it was $920. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4178% b) The nominal monthly interest rate = 0.4137% c) The nominal monthly interest rate = 0.4096% d) The nominal monthly interest rate = 0.4055%
5. Problem 05
Mary has 3700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3840.63 b) 3840.63 c) 3840.51 d) 3821.3
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €280000 for it. If she waits for one year, she will likely get more, say, €303000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 17% per year, compounded monthly (II) 20% per year, compounded semiannually (III) 21% per year, compounded continuously
a) (I) 49.27 months, (II) 43.64 months, (III) 39.61 months b) (I) 46.56 months, (II) 41.65 months, (III) 37.81 months c) (I) 44.12 months, (II) 39.85 months, (III) 36.16 months d) (I) 41.93 months, (II) 38.21 months, (III) 34.66 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 5%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 5% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 3% in the first year, 5% in the second, and 9% in the third. Did you lose out by having locked into the 5% investment? If so, by how much?
a) I = 2506.93, Lost = 60.05 b) I = 2582.93, Lost = 60.1 c) I = 2433.24, Lost = 60 d) I = 2361.76, Lost = 59.95
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 4231.4 b) 3808.3 c) 3385.1 d) 2962
10. Problem 10
Clarence bought a flat for $240000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3600 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 108.6 months b) 100.2 months c) 91.9 months
d) 83.5 months 11. Problem 11
Clarence paid off an $165000 mortgage completely in 48 months. He paid $5400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 35.5211% b) 32.561% c) 29.6009% d) 26.6408%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $17000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 15574.76 b) 14376.7 c) 13178.64 d) 11980.59
13. Problem 13 A bond with a face value of S17000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 15574.76 b) 14376.7 c) 13178.64 d) 11980.59
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2700, and the deal you are offered is the following: You pay $2970 ($2700 plus $270 interest) in 11 equal $270 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $27 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.6703%, APR = 56.0441%, "Effective Yearly Rate = 68.5576% b) Monthly Rate = 4.3111%, APR = 51.733%, "Effective Yearly Rate = 63.284% c) Monthly Rate = 3.9518%, APR = 47.4219%, "Effective Yearly Rate = 58.0103% d) Monthly Rate = 3.5926%, APR = 43.1108%, "Effective Yearly Rate = 52.7366%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 18
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 18 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3400 now and will need an upgrade at the end of two years, which you expect to be $2600. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 219.8 b) Diff = 201.5 c) Diff = 183.2 d) Diff = 164.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 25.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 26%? Show the difference between the two effective interest rates.
a) Diff = -1.25E-05 b) Diff = -1.16E-05 c) Diff = -1.06E-05 d) Diff = -0.96E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 14.5% compounded weekly and checking account interest at 16% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 15.8922%, 17.5716% b) Effective interest rates = 15.7364%, 17.3994% c) Effective interest rates = 15.5806%, 17.2271% d) Effective interest rates = 15.4248%, 17.0548%
4. Problem 04
Tom has a bank deposit now worth $976.25. A year ago, it was $930. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4053% b) The nominal monthly interest rate = 0.4012% c) The nominal monthly interest rate = 0.3972% d) The nominal monthly interest rate = 0.3931%
5. Problem 05
Mary has 3800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 3940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 3940.51 b) 3920.81 c) 3901.11 d) 3881.41
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €290000 for it. If she waits for one year, she will likely get more, say, €314000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 18% per year, compounded monthly (II) 21% per year, compounded semiannually (III) 22% per year, compounded continuously
a) (I) 46.56 months, (II) 41.65 months, (III) 37.81 months b) (I) 44.12 months, (II) 39.85 months, (III) 36.16 months c) (I) 41.93 months, (II) 38.21 months, (III) 34.66 months d) (I) 41.93 months, (II) 39.85 months, (III) 37.81 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 6%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 6% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 4% in the first year, 6% in the second, and 10% in the third. Did you lose out by having locked into the 6% investment? If so, by how much?
a) I = 2433.24, Lost = 60 b) I = 2506.93, Lost = 60.05 c) I = 2361.76, Lost = 59.95 d) I = 2292.45, Lost = 59.9
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 14% compounded monthly, how much money is being lent?
a) 3968.7 b) 3663.5 c) 3358.2 d) 3052.9
10. Problem 10
Clarence bought a flat for $250000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3700 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 93.8 months b) 85.2 months c) 76.7 months
d) 68.2 months 11. Problem 11
Clarence paid off an $170000 mortgage completely in 48 months. He paid $5600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 30.0136% b) 27.0123% c) 24.0109% d) 21.0095%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $18000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 12934 b) 11640.6 c) 10347.2 d) 9053.8
13. Problem 13 A bond with a face value of S18000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 12934 b) 11640.6 c) 10347.2 d) 9053.8
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2800, and the deal you are offered is the following: You pay $3080 ($2800 plus $280 interest) in 11 equal $280 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $28 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5832%, APR = 42.9988%, "Effective Yearly Rate = 52.5715% b) Monthly Rate = 3.2249%, APR = 38.6989%, "Effective Yearly Rate = 47.3144% c) Monthly Rate = 2.8666%, APR = 34.399%, "Effective Yearly Rate = 42.0572% d) Monthly Rate = 2.5083%, APR = 30.0991%, "Effective Yearly Rate = 36.8001%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 19
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 19 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $5900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3450 now and will need an upgrade at the end of two years, which you expect to be $2650. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 190.6 b) Diff = 171.5 c) Diff = 152.5 d) Diff = 133.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 26.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 27%? Show the difference between the two effective interest rates.
a) Diff = -0.03E-05 b) Diff = -0.03E-05 c) Diff = -0.03E-05 d) Diff = -0.02E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 15% compounded weekly and checking account interest at 16.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 16.1583%, 17.8068% b) Effective interest rates = 15.9968%, 17.6287% c) Effective interest rates = 15.8352%, 17.4507% d) Effective interest rates = 15.6736%, 17.2726%
4. Problem 04
Tom has a bank deposit now worth $986.25. A year ago, it was $940. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.4091% b) The nominal monthly interest rate = 0.4051% c) The nominal monthly interest rate = 0.4011% d) The nominal monthly interest rate = 0.397%
5. Problem 05
Mary has 3900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4040.63 b) 4040.63 c) 4040.52 d) 4020.32
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €300000 for it. If she waits for one year, she will likely get more, say, €325000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 19% per year, compounded monthly (II) 22% per year, compounded semiannually (III) 23% per year, compounded continuously
a) (I) 44.12 months, (II) 39.85 months, (III) 36.16 months b) (I) 41.93 months, (II) 38.21 months, (III) 34.66 months c) (I) 41.93 months, (II) 39.85 months, (III) 37.81 months d) (I) 41.93 months, (II) 41.65 months, (III) 41.59 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 7%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 7% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 5% in the first year, 7% in the second, and 11% in the third. Did you lose out by having locked into the 7% investment? If so, by how much?
a) I = 2361.76, Lost = 59.95 b) I = 2433.24, Lost = 60 c) I = 2292.45, Lost = 59.9 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 4974.3 b) 4591.7 c) 4209 d) 3826.4
10. Problem 10
Clarence bought a flat for $260000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3800 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 95.6 months b) 86.9 months c) 78.2 months
d) 69.5 months 11. Problem 11
Clarence paid off an $175000 mortgage completely in 48 months. He paid $5800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 33.4468% b) 30.4062% c) 27.3655% d) 24.3249%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $20000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 14760.18 b) 13624.78 c) 12489.38 d) 11353.98
13. Problem 13 A bond with a face value of S19000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 14760.18 b) 13624.78 c) 12489.38 d) 11353.98
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $2900, and the deal you are offered is the following: You pay $3190 ($2900 plus $290 interest) in 11 equal $290 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $29 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.6469%, APR = 55.7627%, "Effective Yearly Rate = 68.1432% b) Monthly Rate = 4.2894%, APR = 51.4732%, "Effective Yearly Rate = 62.9014% c) Monthly Rate = 3.932%, APR = 47.1838%, "Effective Yearly Rate = 57.6596% d) Monthly Rate = 3.5745%, APR = 42.8944%, "Effective Yearly Rate = 52.4178%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 20
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 20 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3500 now and will need an upgrade at the end of two years, which you expect to be $2700. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 237.6 b) Diff = 217.8 c) Diff = 198 d) Diff = 178.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 27.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 28%? Show the difference between the two effective interest rates.
a) Diff = 0.97E-05 b) Diff = 0.87E-05 c) Diff = 0.78E-05 d) Diff = 0.68E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 15.5% compounded weekly and checking account interest at 17% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 16.7389%, 18.3892% b) Effective interest rates = 16.5715%, 18.2053% c) Effective interest rates = 16.4041%, 18.0214% d) Effective interest rates = 16.2367%, 17.8375%
4. Problem 04
Tom has a bank deposit now worth $996.25. A year ago, it was $950. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3969% b) The nominal monthly interest rate = 0.393% c) The nominal monthly interest rate = 0.389% d) The nominal monthly interest rate = 0.385%
5. Problem 05
Mary has 4000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4140.52 b) 4119.82 c) 4099.12 d) 4078.42
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €310000 for it. If she waits for one year, she will likely get more, say, €336000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 23% per year, compounded semiannually (III) 24% per year, compounded continuously
a) (I) 41.93 months, (II) 38.21 months, (III) 34.66 months b) (I) 41.93 months, (II) 39.85 months, (III) 37.81 months c) (I) 41.93 months, (II) 41.65 months, (III) 41.59 months d) (I) 41.93 months, (II) 43.64 months, (III) 46.21 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 8%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 8% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 6% in the first year, 8% in the second, and 12% in the third. Did you lose out by having locked into the 8% investment? If so, by how much?
a) I = 2292.45, Lost = 59.9 b) I = 2361.76, Lost = 59.95 c) I = 2225.22, Lost = 59.85 d) I = 2160.02, Lost = 59.8
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 5041.3 b) 4537.2 c) 4033.1 d) 3528.9
10. Problem 10
Clarence bought a flat for $270000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $3900 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 88.5 months b) 79.6 months c) 70.8 months
d) 61.9 months 11. Problem 11
Clarence paid off an $180000 mortgage completely in 48 months. He paid $6000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 36.9288% b) 33.8514% c) 30.774% d) 27.6966%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $21000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 14938 b) 13693.17 c) 12448.33 d) 11203.5
13. Problem 13 A bond with a face value of S20000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 14938 b) 13693.17 c) 12448.33 d) 11203.5
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3000, and the deal you are offered is the following: You pay $3300 ($3000 plus $300 interest) in 11 equal $300 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $30 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.2797%, APR = 51.3562%, "Effective Yearly Rate = 62.7293% b) Monthly Rate = 3.923%, APR = 47.0766%, "Effective Yearly Rate = 57.5018% c) Monthly Rate = 3.5664%, APR = 42.7969%, "Effective Yearly Rate = 52.2744% d) Monthly Rate = 3.2098%, APR = 38.5172%, "Effective Yearly Rate = 47.047%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 21
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 21 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3550 now and will need an upgrade at the end of two years, which you expect to be $2750. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 246.5 b) Diff = 225.9 c) Diff = 205.4 d) Diff = 184.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 28.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 29%? Show the difference between the two effective interest rates.
a) Diff = 2.63E-05 b) Diff = 2.43E-05 c) Diff = 2.23E-05 d) Diff = 2.02E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 16% compounded weekly and checking account interest at 17.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 17.8419%, 19.5434% b) Effective interest rates = 17.6687%, 19.3537% c) Effective interest rates = 17.4955%, 19.1639% d) Effective interest rates = 17.3223%, 18.9742%
4. Problem 04
Tom has a bank deposit now worth $1006.25. A year ago, it was $960. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3929% b) The nominal monthly interest rate = 0.3889% c) The nominal monthly interest rate = 0.385% d) The nominal monthly interest rate = 0.3811%
5. Problem 05
Mary has 4100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4240.53 b) 4219.33 c) 4198.12 d) 4176.92
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €320000 for it. If she waits for one year, she will likely get more, say, €347000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 22% per year, compounded semiannually (III) 22% per year, compounded continuously
a) (I) 41.93 months, (II) 39.85 months, (III) 37.81 months b) (I) 41.93 months, (II) 41.65 months, (III) 41.59 months c) (I) 41.93 months, (II) 43.64 months, (III) 46.21 months d) (I) 41.93 months, (II) 45.83 months, (III) 51.99 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 9%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 9% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 7% in the first year, 9% in the second, and 13% in the third. Did you lose out by having locked into the 9% investment? If so, by how much?
a) I = 2225.22, Lost = 59.85 b) I = 2292.45, Lost = 59.9 c) I = 2160.02, Lost = 59.8 d) I = 2096.77, Lost = 59.75
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 5832.3 b) 5249.1 c) 4665.9 d) 4082.6
10. Problem 10
Clarence bought a flat for $280000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4000 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 99 months b) 90 months c) 81 months
d) 72 months 11. Problem 11
Clarence paid off an $185000 mortgage completely in 48 months. He paid $6200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 34.2312% b) 31.1193% c) 28.0074% d) 24.8955%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $22000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 13545.15 b) 12190.64 c) 10836.12 d) 9481.61
13. Problem 13 A bond with a face value of S21000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 13545.15 b) 12190.64 c) 10836.12 d) 9481.61
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3100, and the deal you are offered is the following: You pay $3410 ($3100 plus $310 interest) in 11 equal $310 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $31 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5588%, APR = 42.7056%, "Effective Yearly Rate = 52.1403% b) Monthly Rate = 3.2029%, APR = 38.435%, "Effective Yearly Rate = 46.9262% c) Monthly Rate = 2.847%, APR = 34.1645%, "Effective Yearly Rate = 41.7122% d) Monthly Rate = 2.4912%, APR = 29.8939%, "Effective Yearly Rate = 36.4982%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 22
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 22 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3600 now and will need an upgrade at the end of two years, which you expect to be $2800. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 255.2 b) Diff = 234 c) Diff = 212.7 d) Diff = 191.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 29.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 30%? Show the difference between the two effective interest rates.
a) Diff = 4.07E-05 b) Diff = 3.76E-05 c) Diff = 3.45E-05 d) Diff = 3.13E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 16.5% compounded weekly and checking account interest at 18% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 18.2667%, 19.9531% b) Effective interest rates = 18.0876%, 19.7574% c) Effective interest rates = 17.9085%, 19.5618% d) Effective interest rates = 17.7294%, 19.3662%
4. Problem 04
Tom has a bank deposit now worth $1016.25. A year ago, it was $970. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3928% b) The nominal monthly interest rate = 0.3889% c) The nominal monthly interest rate = 0.385% d) The nominal monthly interest rate = 0.3811%
5. Problem 05
Mary has 4200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4340.63 b) 4340.53 c) 4318.83 d) 4297.13
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €330000 for it. If she waits for one year, she will likely get more, say, €358000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 21% per year, compounded semiannually (III) 20% per year, compounded continuously
a) (I) 41.93 months, (II) 41.65 months, (III) 41.59 months b) (I) 41.93 months, (II) 43.64 months, (III) 46.21 months c) (I) 41.93 months, (II) 45.83 months, (III) 51.99 months d) (I) 41.93 months, (II) 48.26 months, (III) 59.41 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 10%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 10% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 8% in the first year, 10% in the second, and 14% in the third. Did you lose out by having locked into the 10% investment? If so, by how much?
a) I = 2160.02, Lost = 59.8 b) I = 2225.22, Lost = 59.85 c) I = 2096.77, Lost = 59.75 d) I = 2035.44, Lost = 59.7
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 8096.6 b) 7473.8 c) 6851 d) 6228.1
10. Problem 10
Clarence bought a flat for $290000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4100 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 109.7 months b) 100.6 months c) 91.4 months
d) 82.3 months 11. Problem 11
Clarence paid off an $190000 mortgage completely in 48 months. He paid $6400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 31.4463% b) 28.3017% c) 25.157% d) 22.0124%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $23000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 14643.1 b) 13178.79 c) 11714.48 d) 10250.17
13. Problem 13 A bond with a face value of S22000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 14643.1 b) 13178.79 c) 11714.48 d) 10250.17
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3200, and the deal you are offered is the following: You pay $3520 ($3200 plus $320 interest) in 11 equal $320 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $32 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5517%, APR = 42.62%, "Effective Yearly Rate = 52.0145% b) Monthly Rate = 3.1965%, APR = 38.358%, "Effective Yearly Rate = 46.8131% c) Monthly Rate = 2.8413%, APR = 34.096%, "Effective Yearly Rate = 41.6116% d) Monthly Rate = 2.4862%, APR = 29.834%, "Effective Yearly Rate = 36.4102%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 23
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 23 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3650 now and will need an upgrade at the end of two years, which you expect to be $2850. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 286.1 b) Diff = 264.1 c) Diff = 242.1 d) Diff = 220.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 17.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 18%? Show the difference between the two effective interest rates.
a) Diff = -7.99E-05 b) Diff = -7.33E-05 c) Diff = -6.66E-05 d) Diff = -5.99E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 17% compounded weekly and checking account interest at 18.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 18.8676%, 20.5552% b) Effective interest rates = 18.6826%, 20.3536% c) Effective interest rates = 18.4976%, 20.1521% d) Effective interest rates = 18.3126%, 19.9506%
4. Problem 04
Tom has a bank deposit now worth $1026.25. A year ago, it was $980. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3927% b) The nominal monthly interest rate = 0.3889% c) The nominal monthly interest rate = 0.385% d) The nominal monthly interest rate = 0.3812%
5. Problem 05
Mary has 4300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4440.63 b) 4440.63 c) 4440.54 d) 4418.34
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €340000 for it. If she waits for one year, she will likely get more, say, €369000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 20% per year, compounded semiannually (III) 18% per year, compounded continuously
a) (I) 41.93 months, (II) 43.64 months, (III) 46.21 months b) (I) 41.93 months, (II) 45.83 months, (III) 51.99 months c) (I) 41.93 months, (II) 48.26 months, (III) 59.41 months d) (I) 41.93 months, (II) 50.98 months, (III) 69.31 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 11%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 11% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 9% in the first year, 11% in the second, and 15% in the third. Did you lose out by having locked into the 11% investment? If so, by how much?
a) I = 2096.77, Lost = 59.75 b) I = 2160.02, Lost = 59.8 c) I = 2035.44, Lost = 59.7 d) I = 1975.94, Lost = 59.65
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 7506.9 b) 6881.4 c) 6255.8 d) 5630.2
10. Problem 10
Clarence bought a flat for $300000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4200 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 92.8 months b) 83.5 months c) 74.3 months
d) 65 months 11. Problem 11
Clarence paid off an $195000 mortgage completely in 48 months. He paid $6600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 31.7616% b) 28.5854% c) 25.4093% d) 22.2331%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $24000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 20463.43 b) 18889.32 c) 17315.21 d) 15741.1
13. Problem 13 A bond with a face value of S23000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 20463.43 b) 18889.32 c) 17315.21 d) 15741.1
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3300, and the deal you are offered is the following: You pay $3630 ($3300 plus $330 interest) in 11 equal $330 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $33 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.6084%, APR = 55.3014%, "Effective Yearly Rate = 67.4654% b) Monthly Rate = 4.254%, APR = 51.0474%, "Effective Yearly Rate = 62.2757% c) Monthly Rate = 3.8995%, APR = 46.7935%, "Effective Yearly Rate = 57.0861% d) Monthly Rate = 3.545%, APR = 42.5395%, "Effective Yearly Rate = 51.8965%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 24
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 24 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3700 now and will need an upgrade at the end of two years, which you expect to be $2900. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 250.3 b) Diff = 227.5 c) Diff = 204.8 d) Diff = 182
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 16.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 17%? Show the difference between the two effective interest rates.
a) Diff = -7.88E-05 b) Diff = -7.16E-05 c) Diff = -6.45E-05 d) Diff = -5.73E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 17.5% compounded weekly and checking account interest at 19% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 19.6623%, 21.3675% b) Effective interest rates = 19.4714%, 21.16% c) Effective interest rates = 19.2805%, 20.9526% d) Effective interest rates = 19.0896%, 20.7451%
4. Problem 04
Tom has a bank deposit now worth $1036.25. A year ago, it was $990. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3812% b) The nominal monthly interest rate = 0.3774% c) The nominal monthly interest rate = 0.3736% d) The nominal monthly interest rate = 0.3698%
5. Problem 05
Mary has 4400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4540.54 b) 4517.84 c) 4495.14 d) 4472.43
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €350000 for it. If she waits for one year, she will likely get more, say, €380000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 19% per year, compounded semiannually (III) 16% per year, compounded continuously
a) (I) 41.93 months, (II) 45.83 months, (III) 51.99 months b) (I) 41.93 months, (II) 48.26 months, (III) 59.41 months c) (I) 41.93 months, (II) 50.98 months, (III) 69.31 months d) (I) 41.93 months, (II) 54.04 months, (III) 83.18 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 12%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 12% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 10% in the first year, 12% in the second, and 16% in the third. Did you lose out by having locked into the 12% investment? If so, by how much?
a) I = 2035.44, Lost = 59.7 b) I = 2096.77, Lost = 59.75 c) I = 1975.94, Lost = 59.65 d) I = 1918.23, Lost = 59.6
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 6534.6 b) 5940.5 c) 5346.5 d) 4752.4
10. Problem 10
Clarence bought a flat for $310000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4300 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 113 months b) 103.6 months c) 94.2 months
d) 84.8 months 11. Problem 11
Clarence paid off an $200000 mortgage completely in 48 months. He paid $6800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 38.4711% b) 35.2652% c) 32.0593% d) 28.8533%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $25000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 16838.33 b) 15154.49 c) 13470.66 d) 11786.83
13. Problem 13 A bond with a face value of S24000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 16838.33 b) 15154.49 c) 13470.66 d) 11786.83
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3400, and the deal you are offered is the following: You pay $3740 ($3400 plus $340 interest) in 11 equal $340 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $34 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5386%, APR = 42.4638%, "Effective Yearly Rate = 51.7853% b) Monthly Rate = 3.1848%, APR = 38.2174%, "Effective Yearly Rate = 46.6068% c) Monthly Rate = 2.8309%, APR = 33.971%, "Effective Yearly Rate = 41.4283% d) Monthly Rate = 2.4771%, APR = 29.7246%, "Effective Yearly Rate = 36.2497%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 25
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 25 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3750 now and will need an upgrade at the end of two years, which you expect to be $2950. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 281.8 b) Diff = 258.3 c) Diff = 234.8 d) Diff = 211.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 15.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 16%? Show the difference between the two effective interest rates.
a) Diff = -9.14E-05 b) Diff = -8.38E-05 c) Diff = -7.62E-05 d) Diff = -6.86E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 18% compounded weekly and checking account interest at 19.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 19.8814%, 21.5542% b) Effective interest rates = 19.6845%, 21.3408% c) Effective interest rates = 19.4877%, 21.1274% d) Effective interest rates = 19.2908%, 20.9139%
4. Problem 04
Tom has a bank deposit now worth $1046.25. A year ago, it was $1000. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3775% b) The nominal monthly interest rate = 0.3737% c) The nominal monthly interest rate = 0.3699% d) The nominal monthly interest rate = 0.3662%
5. Problem 05
Mary has 4500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4640.55 b) 4617.34 c) 4594.14 d) 4570.94
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €360000 for it. If she waits for one year, she will likely get more, say, €390000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 18% per year, compounded semiannually (III) 14% per year, compounded continuously
a) (I) 41.93 months, (II) 48.26 months, (III) 59.41 months b) (I) 41.93 months, (II) 50.98 months, (III) 69.31 months c) (I) 41.93 months, (II) 54.04 months, (III) 83.18 months d) (I) 41.93 months, (II) 57.51 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 13%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 13% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 11% in the first year, 13% in the second, and 17% in the third. Did you lose out by having locked into the 13% investment? If so, by how much?
a) I = 1975.94, Lost = 59.65 b) I = 2035.44, Lost = 59.7 c) I = 1918.23, Lost = 59.6 d) I = 1862.25, Lost = 59.55
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 5306.1 b) 4775.5 c) 4244.9 d) 3714.3
10. Problem 10
Clarence bought a flat for $320000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4400 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 124.1 months b) 114.6 months c) 105 months
d) 95.5 months 11. Problem 11
Clarence paid off an $205000 mortgage completely in 48 months. He paid $7000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 38.8089% b) 35.5748% c) 32.3407% d) 29.1067%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $26000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 17934.12 b) 16140.71 c) 14347.3 d) 12553.89
13. Problem 13 A bond with a face value of S25000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 17934.12 b) 16140.71 c) 14347.3 d) 12553.89
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3500, and the deal you are offered is the following: You pay $3850 ($3500 plus $350 interest) in 11 equal $350 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $35 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5327%, APR = 42.3923%, "Effective Yearly Rate = 51.6806% b) Monthly Rate = 3.1794%, APR = 38.1531%, "Effective Yearly Rate = 46.5125% c) Monthly Rate = 2.8262%, APR = 33.9138%, "Effective Yearly Rate = 41.3445% d) Monthly Rate = 2.4729%, APR = 29.6746%, "Effective Yearly Rate = 36.1764%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 26
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 26 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3800 now and will need an upgrade at the end of two years, which you expect to be $3000. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 314.9 b) Diff = 290.6 c) Diff = 266.4 d) Diff = 242.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 14.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 15%? Show the difference between the two effective interest rates.
a) Diff = -8.04E-05 b) Diff = -7.23E-05 c) Diff = -6.43E-05 d) Diff = -5.63E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 18.5% compounded weekly and checking account interest at 20% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 20.4852%, 22.1585% b) Effective interest rates = 20.2823%, 21.9391% c) Effective interest rates = 20.0795%, 21.7197% d) Effective interest rates = 19.8767%, 21.5003%
4. Problem 04
Tom has a bank deposit now worth $1056.25. A year ago, it was $1010. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.385% b) The nominal monthly interest rate = 0.3813% c) The nominal monthly interest rate = 0.3776% d) The nominal monthly interest rate = 0.3738%
5. Problem 05
Mary has 4600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4740.63 b) 4740.63 c) 4740.63 d) 4740.55
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €370000 for it. If she waits for one year, she will likely get more, say, €400000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 17% per year, compounded semiannually (III) 12% per year, compounded continuously
a) (I) 41.93 months, (II) 50.98 months, (III) 69.31 months b) (I) 41.93 months, (II) 54.04 months, (III) 83.18 months c) (I) 41.93 months, (II) 57.51 months, (III) 103.97 months d) (I) 41.93 months, (II) 61.47 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 14%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 14% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 12% in the first year, 14% in the second, and 18% in the third. Did you lose out by having locked into the 14% investment? If so, by how much?
a) I = 1918.23, Lost = 59.6 b) I = 1975.94, Lost = 59.65 c) I = 1862.25, Lost = 59.55 d) I = 2742.1, Lost = 60.2
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 4374.7 b) 3937.2 c) 3499.7 d) 3062.3
10. Problem 10
Clarence bought a flat for $330000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4500 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 96.7 months b) 87 months c) 77.4 months
d) 67.7 months 11. Problem 11
Clarence paid off an $210000 mortgage completely in 48 months. He paid $7200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 39.1288% b) 35.8681% c) 32.6073% d) 29.3466%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $27000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 20930.79 b) 19027.99 c) 17125.19 d) 15222.39
13. Problem 13 A bond with a face value of S26000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 20930.79 b) 19027.99 c) 17125.19 d) 15222.39
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3600, and the deal you are offered is the following: You pay $3960 ($3600 plus $360 interest) in 11 equal $360 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $36 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.8798%, APR = 46.5572%, "Effective Yearly Rate = 56.7399% b) Monthly Rate = 3.5271%, APR = 42.3248%, "Effective Yearly Rate = 51.5817% c) Monthly Rate = 3.1744%, APR = 38.0923%, "Effective Yearly Rate = 46.4235% d) Monthly Rate = 2.8217%, APR = 33.8598%, "Effective Yearly Rate = 41.2654%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 27
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 27 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3850 now and will need an upgrade at the end of two years, which you expect to be $3050. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 274.6 b) Diff = 249.6 c) Diff = 224.6 d) Diff = 199.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 13.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 14%? Show the difference between the two effective interest rates.
a) Diff = -10.1E-05 b) Diff = -9.26E-05 c) Diff = -8.41E-05 d) Diff = -7.57E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 19% compounded weekly and checking account interest at 20.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 21.5096%, 23.2164% b) Effective interest rates = 21.3008%, 22.991% c) Effective interest rates = 21.0919%, 22.7656% d) Effective interest rates = 20.8831%, 22.5402%
4. Problem 04
Tom has a bank deposit now worth $1066.25. A year ago, it was $1020. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3813% b) The nominal monthly interest rate = 0.3776% c) The nominal monthly interest rate = 0.3739% d) The nominal monthly interest rate = 0.3702%
5. Problem 05
Mary has 4700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4840.63 b) 4840.63 c) 4840.63 d) 4840.55
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €380000 for it. If she waits for one year, she will likely get more, say, €411000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 16% per year, compounded semiannually (III) 10% per year, compounded continuously
a) (I) 41.93 months, (II) 54.04 months, (III) 83.18 months b) (I) 41.93 months, (II) 57.51 months, (III) 103.97 months c) (I) 41.93 months, (II) 61.47 months, (III) 138.63 months d) (I) 41.93 months, (II) 66.04 months, (III) 207.94 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 15%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 15% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 13% in the first year, 15% in the second, and 19% in the third. Did you lose out by having locked into the 15% investment? If so, by how much?
a) I = 1862.25, Lost = 59.55 b) I = 1918.23, Lost = 59.6 c) I = 2742.1, Lost = 60.2 d) I = 2661.29, Lost = 60.15
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 12% compounded monthly, how much money is being lent?
a) 3800.5 b) 3483.8 c) 3167 d) 2850.3
10. Problem 10
Clarence bought a flat for $340000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4600 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 107.7 months b) 97.9 months c) 88.1 months
d) 78.3 months 11. Problem 11
Clarence paid off an $215000 mortgage completely in 48 months. He paid $7400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 36.1462% b) 32.8602% c) 29.5742% d) 26.2881%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $28000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 26155.42 b) 24143.46 c) 22131.51 d) 20119.55
13. Problem 13 A bond with a face value of S27000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 26155.42 b) 24143.46 c) 22131.51 d) 20119.55
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3700, and the deal you are offered is the following: You pay $4070 ($3700 plus $370 interest) in 11 equal $370 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $37 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5783%, APR = 54.9391%, "Effective Yearly Rate = 66.9346% b) Monthly Rate = 4.2261%, APR = 50.713%, "Effective Yearly Rate = 61.7858% c) Monthly Rate = 3.8739%, APR = 46.487%, "Effective Yearly Rate = 56.637% d) Monthly Rate = 3.5217%, APR = 42.2609%, "Effective Yearly Rate = 51.4882%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 28
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 28 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3900 now and will need an upgrade at the end of two years, which you expect to be $3100. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 308.4 b) Diff = 282.7 c) Diff = 257 d) Diff = 231.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 12.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 13%? Show the difference between the two effective interest rates.
a) Diff = -9.63E-05 b) Diff = -8.75E-05 c) Diff = -7.88E-05 d) Diff = -7E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 19.5% compounded weekly and checking account interest at 21% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 22.1314%, 23.8382% b) Effective interest rates = 21.9165%, 23.6068% c) Effective interest rates = 21.7017%, 23.3754% d) Effective interest rates = 21.4868%, 23.1439%
4. Problem 04
Tom has a bank deposit now worth $1076.25. A year ago, it was $1030. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3667% b) The nominal monthly interest rate = 0.363% c) The nominal monthly interest rate = 0.3594% d) The nominal monthly interest rate = 0.3557%
5. Problem 05
Mary has 4800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 4940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 4940.56 b) 4915.86 c) 4891.15 d) 4866.45
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €390000 for it. If she waits for one year, she will likely get more, say, €422000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 15% per year, compounded semiannually (III) 8% per year, compounded continuously
a) (I) 41.93 months, (II) 57.51 months, (III) 103.97 months b) (I) 41.93 months, (II) 61.47 months, (III) 138.63 months c) (I) 41.93 months, (II) 66.04 months, (III) 207.94 months d) (I) 41.93 months, (II) 71.37 months, (III) 415.89 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 16%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 16% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 14% in the first year, 16% in the second, and 20% in the third. Did you lose out by having locked into the 16% investment? If so, by how much?
a) I = 2742.1, Lost = 60.2 b) I = 1862.25, Lost = 59.55 c) I = 2661.29, Lost = 60.15 d) I = 2582.93, Lost = 60.1
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 4239.9 b) 3854.5 c) 3469 d) 3083.6
10. Problem 10
Clarence bought a flat for $350000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4700 per month at 8% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 128.8 months b) 118.9 months c) 109 months
d) 99.1 months 11. Problem 11
Clarence paid off an $220000 mortgage completely in 48 months. He paid $7600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 33.1056% b) 29.795% c) 26.4844% d) 23.1739%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $30000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 20437.17 b) 18734.07 c) 17030.98 d) 15327.88
13. Problem 13 A bond with a face value of S28000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 20437.17 b) 18734.07 c) 17030.98 d) 15327.88
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3800, and the deal you are offered is the following: You pay $4180 ($3800 plus $380 interest) in 11 equal $380 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $38 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.22%, APR = 50.6404%, "Effective Yearly Rate = 61.6795% b) Monthly Rate = 3.8684%, APR = 46.4203%, "Effective Yearly Rate = 56.5395% c) Monthly Rate = 3.5167%, APR = 42.2003%, "Effective Yearly Rate = 51.3996% d) Monthly Rate = 3.165%, APR = 37.9803%, "Effective Yearly Rate = 46.2596%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 29
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 29 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $6900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $3950 now and will need an upgrade at the end of two years, which you expect to be $3150. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 317.2 b) Diff = 290.7 c) Diff = 264.3 d) Diff = 237.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 11.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 12%? Show the difference between the two effective interest rates.
a) Diff = -10.86E-05 b) Diff = -9.96E-05 c) Diff = -9.05E-05 d) Diff = -8.15E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 20% compounded weekly and checking account interest at 21.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 22.3144%, 23.9879% b) Effective interest rates = 22.0934%, 23.7504% c) Effective interest rates = 21.8725%, 23.5129% d) Effective interest rates = 21.6516%, 23.2754%
4. Problem 04
Tom has a bank deposit now worth $1086.25. A year ago, it was $1040. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3669% b) The nominal monthly interest rate = 0.3632% c) The nominal monthly interest rate = 0.3596% d) The nominal monthly interest rate = 0.356%
5. Problem 05
Mary has 4900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5040.63 b) 5040.56 c) 5015.36 d) 4990.16
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €400000 for it. If she waits for one year, she will likely get more, say, €433000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 14% per year, compounded semiannually (III) 6% per year, compounded continuously
a) (I) 41.93 months, (II) 61.47 months, (III) 138.63 months b) (I) 41.93 months, (II) 66.04 months, (III) 207.94 months c) (I) 41.93 months, (II) 71.37 months, (III) 415.89 months d) (I) 44.12 months, (II) 77.68 months, (III) 277.26 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 3%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 3% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 1% in the first year, 3% in the second, and 7% in the third. Did you lose out by having locked into the 3% investment? If so, by how much?
a) I = 2661.29, Lost = 60.15 b) I = 2742.1, Lost = 60.2 c) I = 2582.93, Lost = 60.1 d) I = 2506.93, Lost = 60.05
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 5098.5 b) 4588.7 c) 4078.8 d) 3569
10. Problem 10
Clarence bought a flat for $360000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4800 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 109.1 months b) 100 months c) 90.9 months
d) 81.8 months 11. Problem 11
Clarence paid off an $225000 mortgage completely in 48 months. He paid $7800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 43.3429% b) 40.0088% c) 36.6747% d) 33.3407%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $31000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 18376.11 b) 16538.5 c) 14700.89 d) 12863.28
13. Problem 13 A bond with a face value of S29000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 18376.11 b) 16538.5 c) 14700.89 d) 12863.28
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $3900, and the deal you are offered is the following: You pay $4290 ($3900 plus $390 interest) in 11 equal $390 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $39 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.5119%, APR = 42.1428%, "Effective Yearly Rate = 51.3155% b) Monthly Rate = 3.1607%, APR = 37.9285%, "Effective Yearly Rate = 46.184% c) Monthly Rate = 2.8095%, APR = 33.7143%, "Effective Yearly Rate = 41.0524% d) Monthly Rate = 2.4583%, APR = 29.5%, "Effective Yearly Rate = 35.9209%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 30
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 30 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4000 now and will need an upgrade at the end of two years, which you expect to be $3200. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 326 b) Diff = 298.9 c) Diff = 271.7 d) Diff = 244.5
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 10.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 11%? Show the difference between the two effective interest rates.
a) Diff = -11.17E-05 b) Diff = -10.24E-05 c) Diff = -9.31E-05 d) Diff = -8.38E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 20.5% compounded weekly and checking account interest at 22% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 22.703%, 24.3597% b) Effective interest rates = 22.476%, 24.1161% c) Effective interest rates = 22.249%, 23.8725% d) Effective interest rates = 22.022%, 23.6289%
4. Problem 04
Tom has a bank deposit now worth $1096.25. A year ago, it was $1050. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3599% b) The nominal monthly interest rate = 0.3563% c) The nominal monthly interest rate = 0.3527% d) The nominal monthly interest rate = 0.3491%
5. Problem 05
Mary has 5000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5140.57 b) 5114.86 c) 5089.16 d) 5063.46
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €410000 for it. If she waits for one year, she will likely get more, say, €444000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 13% per year, compounded semiannually (III) 4% per year, compounded continuously
a) (I) 41.93 months, (II) 66.04 months, (III) 207.94 months b) (I) 41.93 months, (II) 71.37 months, (III) 415.89 months c) (I) 44.12 months, (II) 77.68 months, (III) 277.26 months d) (I) 46.56 months, (II) 85.24 months, (III) 207.94 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 4%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 4% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 2% in the first year, 4% in the second, and 8% in the third. Did you lose out by having locked into the 4% investment? If so, by how much?
a) I = 2582.93, Lost = 60.1 b) I = 2661.29, Lost = 60.15 c) I = 2506.93, Lost = 60.05 d) I = 2433.24, Lost = 60
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 5921.6 b) 5329.4 c) 4737.3 d) 4145.1
10. Problem 10
Clarence bought a flat for $370000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $4900 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 110.2 months b) 101 months c) 91.8 months
d) 82.6 months 11. Problem 11
Clarence paid off an $230000 mortgage completely in 48 months. He paid $8000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.2775% b) 36.921% c) 33.5646% d) 30.2081%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $32000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 23642.45 b) 21672.24 c) 19702.04 d) 17731.84
13. Problem 13 A bond with a face value of S30000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 23642.45 b) 21672.24 c) 19702.04 d) 17731.84
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4000, and the deal you are offered is the following: You pay $4400 ($4000 plus $400 interest) in 11 equal $400 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $40 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.2088%, APR = 50.5058%, "Effective Yearly Rate = 61.4828% b) Monthly Rate = 3.8581%, APR = 46.297%, "Effective Yearly Rate = 56.3592% c) Monthly Rate = 3.5073%, APR = 42.0882%, "Effective Yearly Rate = 51.2357% d) Monthly Rate = 3.1566%, APR = 37.8794%, "Effective Yearly Rate = 46.1121%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 31
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 31 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4050 now and will need an upgrade at the end of two years, which you expect to be $3250. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 334.9 b) Diff = 307 c) Diff = 279.1 d) Diff = 251.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 9.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 10%? Show the difference between the two effective interest rates.
a) Diff = -11.45E-05 b) Diff = -10.49E-05 c) Diff = -9.54E-05 d) Diff = -8.58E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 21% compounded weekly and checking account interest at 22.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 23.782%, 25.4711% b) Effective interest rates = 23.5488%, 25.2214% c) Effective interest rates = 23.3156%, 24.9716% d) Effective interest rates = 23.0825%, 24.7219%
4. Problem 04
Tom has a bank deposit now worth $1106.25. A year ago, it was $1060. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3672% b) The nominal monthly interest rate = 0.3637% c) The nominal monthly interest rate = 0.3601% d) The nominal monthly interest rate = 0.3565%
5. Problem 05
Mary has 5100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5240.63 b) 5240.63 c) 5240.63 d) 5240.57
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €420000 for it. If she waits for one year, she will likely get more, say, €455000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 20% per year, compounded monthly (II) 12% per year, compounded semiannually (III) 2% per year, compounded continuously
a) (I) 41.93 months, (II) 71.37 months, (III) 415.89 months b) (I) 44.12 months, (II) 77.68 months, (III) 277.26 months c) (I) 46.56 months, (II) 85.24 months, (III) 207.94 months d) (I) 49.27 months, (II) 94.48 months, (III) 166.36 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 5%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 5% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 3% in the first year, 5% in the second, and 9% in the third. Did you lose out by having locked into the 5% investment? If so, by how much?
a) I = 2506.93, Lost = 60.05 b) I = 2582.93, Lost = 60.1 c) I = 2433.24, Lost = 60 d) I = 2361.76, Lost = 59.95
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 8252.2 b) 7617.4 c) 6982.6 d) 6347.8
10. Problem 10
Clarence bought a flat for $380000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5000 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 92.6 months b) 83.4 months c) 74.1 months
d) 64.8 months 11. Problem 11
Clarence paid off an $235000 mortgage completely in 48 months. He paid $8200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.5336% b) 37.1558% c) 33.778% d) 30.4002%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $33000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 25211.59 b) 23110.63 c) 21009.66 d) 18908.69
13. Problem 13 A bond with a face value of S31000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 25211.59 b) 23110.63 c) 21009.66 d) 18908.69
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4100, and the deal you are offered is the following: You pay $4510 ($4100 plus $410 interest) in 11 equal $410 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $41 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.2036%, APR = 50.4435%, "Effective Yearly Rate = 61.3917% b) Monthly Rate = 3.8533%, APR = 46.2398%, "Effective Yearly Rate = 56.2757% c) Monthly Rate = 3.503%, APR = 42.0362%, "Effective Yearly Rate = 51.1597% d) Monthly Rate = 3.1527%, APR = 37.8326%, "Effective Yearly Rate = 46.0438%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 32
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 32 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4100 now and will need an upgrade at the end of two years, which you expect to be $3300. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 286.4 b) Diff = 257.8 c) Diff = 229.1 d) Diff = 200.5
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 8.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 9%? Show the difference between the two effective interest rates.
a) Diff = -9.73E-05 b) Diff = -8.75E-05 c) Diff = -7.78E-05 d) Diff = -6.81E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 21.5% compounded weekly and checking account interest at 23% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 23.9312%, 25.5864% b) Effective interest rates = 23.6919%, 25.3305% c) Effective interest rates = 23.4526%, 25.0746% d) Effective interest rates = 23.2133%, 24.8188%
4. Problem 04
Tom has a bank deposit now worth $1116.25. A year ago, it was $1070. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3603% b) The nominal monthly interest rate = 0.3568% c) The nominal monthly interest rate = 0.3533% d) The nominal monthly interest rate = 0.3497%
5. Problem 05
Mary has 5200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5340.63 b) 5340.63 c) 5340.57 d) 5313.87
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €430000 for it. If she waits for one year, she will likely get more, say, €466000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 19% per year, compounded monthly (II) 11% per year, compounded semiannually (III) 3% per year, compounded continuously
a) (I) 44.12 months, (II) 77.68 months, (III) 277.26 months b) (I) 46.56 months, (II) 85.24 months, (III) 207.94 months c) (I) 49.27 months, (II) 94.48 months, (III) 166.36 months d) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 6%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 6% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 4% in the first year, 6% in the second, and 10% in the third. Did you lose out by having locked into the 6% investment? If so, by how much?
a) I = 2433.24, Lost = 60 b) I = 2506.93, Lost = 60.05 c) I = 2361.76, Lost = 59.95 d) I = 2292.45, Lost = 59.9
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 6400.2 b) 5760.2 c) 5120.1 d) 4480.1
10. Problem 10
Clarence bought a flat for $390000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5100 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 112.1 months b) 102.8 months c) 93.5 months
d) 84.1 months 11. Problem 11
Clarence paid off an $240000 mortgage completely in 48 months. He paid $8400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 37.3798% b) 33.9817% c) 30.5835% d) 27.1853%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $34000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 24529.88 b) 22299.89 c) 20069.9 d) 17839.91
13. Problem 13 A bond with a face value of S32000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 24529.88 b) 22299.89 c) 20069.9 d) 17839.91
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4200, and the deal you are offered is the following: You pay $4620 ($4200 plus $420 interest) in 11 equal $420 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $42 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.8488%, APR = 46.1854%, "Effective Yearly Rate = 56.1962% b) Monthly Rate = 3.4989%, APR = 41.9867%, "Effective Yearly Rate = 51.0874% c) Monthly Rate = 3.149%, APR = 37.788%, "Effective Yearly Rate = 45.9787% d) Monthly Rate = 2.7991%, APR = 33.5894%, "Effective Yearly Rate = 40.87%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 33
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 33 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4150 now and will need an upgrade at the end of two years, which you expect to be $3350. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 293.8 b) Diff = 264.4 c) Diff = 235 d) Diff = 205.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 7.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 8%? Show the difference between the two effective interest rates.
a) Diff = -12.85E-05 b) Diff = -11.86E-05 c) Diff = -10.87E-05 d) Diff = -9.88E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 22% compounded weekly and checking account interest at 23.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 25.2864%, 26.99% b) Effective interest rates = 25.0409%, 26.728% c) Effective interest rates = 24.7954%, 26.4659% d) Effective interest rates = 24.5499%, 26.2039%
4. Problem 04
Tom has a bank deposit now worth $1126.25. A year ago, it was $1080. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3606% b) The nominal monthly interest rate = 0.357% c) The nominal monthly interest rate = 0.3535% d) The nominal monthly interest rate = 0.35%
5. Problem 05
Mary has 5300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5440.63 b) 5440.63 c) 5440.63 d) 5440.57
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €440000 for it. If she waits for one year, she will likely get more, say, €477000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 18% per year, compounded monthly (II) 10% per year, compounded semiannually (III) 4% per year, compounded continuously
a) (I) 46.56 months, (II) 85.24 months, (III) 207.94 months b) (I) 49.27 months, (II) 94.48 months, (III) 166.36 months c) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months d) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 7%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 7% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 5% in the first year, 7% in the second, and 11% in the third. Did you lose out by having locked into the 7% investment? If so, by how much?
a) I = 2361.76, Lost = 59.95 b) I = 2433.24, Lost = 60 c) I = 2292.45, Lost = 59.9 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 6100.3 b) 5490.3 c) 4880.3 d) 4270.2
10. Problem 10
Clarence bought a flat for $400000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5200 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 122.5 months b) 113.1 months c) 103.7 months
d) 94.2 months 11. Problem 11
Clarence paid off an $245000 mortgage completely in 48 months. He paid $8600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 37.5939% b) 34.1763% c) 30.7586% d) 27.341%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $35000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 30645.76 b) 28288.39 c) 25931.02 d) 23573.66
13. Problem 13 A bond with a face value of S33000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 30645.76 b) 28288.39 c) 25931.02 d) 23573.66
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4300, and the deal you are offered is the following: You pay $4730 ($4300 plus $430 interest) in 11 equal $430 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $43 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5434%, APR = 54.5213%, "Effective Yearly Rate = 66.3241% b) Monthly Rate = 4.1939%, APR = 50.3274%, "Effective Yearly Rate = 61.2222% c) Monthly Rate = 3.8445%, APR = 46.1334%, "Effective Yearly Rate = 56.1204% d) Monthly Rate = 3.495%, APR = 41.9395%, "Effective Yearly Rate = 51.0185%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 34
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 34 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4200 now and will need an upgrade at the end of two years, which you expect to be $3400. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 391.6 b) Diff = 361.4 c) Diff = 331.3 d) Diff = 301.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 6.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 7%? Show the difference between the two effective interest rates.
a) Diff = -13.01E-05 b) Diff = -12.01E-05 c) Diff = -11.01E-05 d) Diff = -10E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 22.5% compounded weekly and checking account interest at 24% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 25.9266%, 27.6289% b) Effective interest rates = 25.6749%, 27.3607% c) Effective interest rates = 25.4232%, 27.0924% d) Effective interest rates = 25.1715%, 26.8242%
4. Problem 04
Tom has a bank deposit now worth $1136.25. A year ago, it was $1090. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3504% b) The nominal monthly interest rate = 0.3469% c) The nominal monthly interest rate = 0.3434% d) The nominal monthly interest rate = 0.34%
5. Problem 05
Mary has 5400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5540.63 b) 5540.58 c) 5512.87 d) 5485.17
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €450000 for it. If she waits for one year, she will likely get more, say, €488000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 17% per year, compounded monthly (II) 9% per year, compounded semiannually (III) 5% per year, compounded continuously
a) (I) 49.27 months, (II) 94.48 months, (III) 166.36 months b) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months c) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months d) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 8%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 8% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 6% in the first year, 8% in the second, and 12% in the third. Did you lose out by having locked into the 8% investment? If so, by how much?
a) I = 2292.45, Lost = 59.9 b) I = 2361.76, Lost = 59.95 c) I = 2225.22, Lost = 59.85 d) I = 2160.02, Lost = 59.8
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 6562.5 b) 6015.7 c) 5468.8 d) 4921.9
10. Problem 10
Clarence bought a flat for $410000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5300 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 123.5 months b) 114 months c) 104.5 months
d) 95 months 11. Problem 11
Clarence paid off an $250000 mortgage completely in 48 months. He paid $8800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 44.6711% b) 41.2349% c) 37.7986% d) 34.3624%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $36000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 27315.05 b) 24831.86 c) 22348.68 d) 19865.49
13. Problem 13 A bond with a face value of S34000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 27315.05 b) 24831.86 c) 22348.68 d) 19865.49
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4400, and the deal you are offered is the following: You pay $4840 ($4400 plus $440 interest) in 11 equal $440 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $44 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.8403%, APR = 46.0838%, "Effective Yearly Rate = 56.048% b) Monthly Rate = 3.4912%, APR = 41.8944%, "Effective Yearly Rate = 50.9527% c) Monthly Rate = 3.1421%, APR = 37.7049%, "Effective Yearly Rate = 45.8574% d) Monthly Rate = 2.793%, APR = 33.5155%, "Effective Yearly Rate = 40.7622%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 35
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 35 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4250 now and will need an upgrade at the end of two years, which you expect to be $3450. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 308.5 b) Diff = 277.7 c) Diff = 246.8 d) Diff = 216
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 5.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 6%? Show the difference between the two effective interest rates.
a) Diff = -12.11E-05 b) Diff = -11.1E-05 c) Diff = -10.09E-05 d) Diff = -9.08E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 23% compounded weekly and checking account interest at 24.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 26.3121%, 27.9962% b) Effective interest rates = 26.0541%, 27.7217% c) Effective interest rates = 25.7962%, 27.4473% d) Effective interest rates = 25.5382%, 27.1728%
4. Problem 04
Tom has a bank deposit now worth $1146.25. A year ago, it was $1100. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3438% b) The nominal monthly interest rate = 0.3404% c) The nominal monthly interest rate = 0.3369% d) The nominal monthly interest rate = 0.3335%
5. Problem 05
Mary has 5500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5640.58 b) 5612.38 c) 5584.17 d) 5555.97
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €460000 for it. If she waits for one year, she will likely get more, say, €499000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 16% per year, compounded monthly (II) 8% per year, compounded semiannually (III) 6% per year, compounded continuously
a) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months b) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months c) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months d) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 9%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 9% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 7% in the first year, 9% in the second, and 13% in the third. Did you lose out by having locked into the 9% investment? If so, by how much?
a) I = 2225.22, Lost = 59.85 b) I = 2292.45, Lost = 59.9 c) I = 2160.02, Lost = 59.8 d) I = 2096.77, Lost = 59.75
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 5882.6 b) 5430 c) 4977.5 d) 4525
10. Problem 10
Clarence bought a flat for $420000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5400 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 114.9 months b) 105.3 months c) 95.7 months
d) 86.2 months 11. Problem 11
Clarence paid off an $255000 mortgage completely in 48 months. He paid $9000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 44.9047% b) 41.4505% c) 37.9963% d) 34.5421%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $37000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 31290.47 b) 28682.93 c) 26075.39 d) 23467.85
13. Problem 13 A bond with a face value of S35000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 31290.47 b) 28682.93 c) 26075.39 d) 23467.85
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4500, and the deal you are offered is the following: You pay $4950 ($4500 plus $450 interest) in 11 equal $450 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $45 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.1851%, APR = 50.2215%, "Effective Yearly Rate = 61.0678% b) Monthly Rate = 3.8364%, APR = 46.0364%, "Effective Yearly Rate = 55.9788% c) Monthly Rate = 3.4876%, APR = 41.8513%, "Effective Yearly Rate = 50.8899% d) Monthly Rate = 3.1388%, APR = 37.6661%, "Effective Yearly Rate = 45.8009%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 36
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 36 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4300 now and will need an upgrade at the end of two years, which you expect to be $3500. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 379.1 b) Diff = 347.5 c) Diff = 315.9 d) Diff = 284.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 4.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 5%? Show the difference between the two effective interest rates.
a) Diff = -11.17E-05 b) Diff = -10.15E-05 c) Diff = -9.14E-05 d) Diff = -8.12E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 23.5% compounded weekly and checking account interest at 25% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 26.9524%, 28.6346% b) Effective interest rates = 26.6882%, 28.3539% c) Effective interest rates = 26.4239%, 28.0732% d) Effective interest rates = 26.1597%, 27.7924%
4. Problem 04
Tom has a bank deposit now worth $1156.25. A year ago, it was $1110. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3476% b) The nominal monthly interest rate = 0.3442% c) The nominal monthly interest rate = 0.3408% d) The nominal monthly interest rate = 0.3374%
5. Problem 05
Mary has 5600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5740.63 b) 5740.63 c) 5740.58 d) 5711.88
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €470000 for it. If she waits for one year, she will likely get more, say, €510000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 15% per year, compounded monthly (II) 7% per year, compounded semiannually (III) 7% per year, compounded continuously
a) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months b) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months c) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months d) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 10%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 10% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 8% in the first year, 10% in the second, and 14% in the third. Did you lose out by having locked into the 10% investment? If so, by how much?
a) I = 2160.02, Lost = 59.8 b) I = 2225.22, Lost = 59.85 c) I = 2096.77, Lost = 59.75 d) I = 2035.44, Lost = 59.7
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 10% compounded monthly, how much money is being lent?
a) 4273.8 b) 3945 c) 3616.3 d) 3287.5
10. Problem 10
Clarence bought a flat for $430000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5500 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 125.4 months b) 115.7 months c) 106.1 months
d) 96.4 months 11. Problem 11
Clarence paid off an $260000 mortgage completely in 48 months. He paid $9200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 45.1331% b) 41.6613% c) 38.1896% d) 34.7178%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $38000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 35496.64 b) 32766.13 c) 30035.62 d) 27305.11
13. Problem 13 A bond with a face value of S36000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 35496.64 b) 32766.13 c) 30035.62 d) 27305.11
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4600, and the deal you are offered is the following: You pay $5060 ($4600 plus $460 interest) in 11 equal $460 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $46 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.4842%, APR = 41.81%, "Effective Yearly Rate = 50.8297% b) Monthly Rate = 3.1358%, APR = 37.629%, "Effective Yearly Rate = 45.7468% c) Monthly Rate = 2.7873%, APR = 33.448%, "Effective Yearly Rate = 40.6638% d) Monthly Rate = 2.4389%, APR = 29.267%, "Effective Yearly Rate = 35.5808%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 37
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 37 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4350 now and will need an upgrade at the end of two years, which you expect to be $3550. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 355.6 b) Diff = 323.3 c) Diff = 291 d) Diff = 258.6
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 3.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 4%? Show the difference between the two effective interest rates.
a) Diff = -10.18E-05 b) Diff = -9.16E-05 c) Diff = -8.14E-05 d) Diff = -7.13E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 24% compounded weekly and checking account interest at 25.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 27.0547%, 28.7019% b) Effective interest rates = 26.7842%, 28.4148% c) Effective interest rates = 26.5136%, 28.1278% d) Effective interest rates = 26.2431%, 27.8408%
4. Problem 04
Tom has a bank deposit now worth $1166.25. A year ago, it was $1120. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3378% b) The nominal monthly interest rate = 0.3344% c) The nominal monthly interest rate = 0.331% d) The nominal monthly interest rate = 0.3276%
5. Problem 05
Mary has 5700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5840.59 b) 5811.38 c) 5782.18 d) 5752.98
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €480000 for it. If she waits for one year, she will likely get more, say, €520000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 14% per year, compounded monthly (II) 6% per year, compounded semiannually (III) 8% per year, compounded continuously
a) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months b) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months c) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months d) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 11%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 11% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 9% in the first year, 11% in the second, and 15% in the third. Did you lose out by having locked into the 11% investment? If so, by how much?
a) I = 2096.77, Lost = 59.75 b) I = 2160.02, Lost = 59.8 c) I = 2035.44, Lost = 59.7 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 3882.9 b) 3494.6 c) 3106.3 d) 2718
10. Problem 10
Clarence bought a flat for $440000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5600 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 116.5 months b) 106.8 months c) 97.1 months
d) 87.4 months 11. Problem 11
Clarence paid off an $265000 mortgage completely in 48 months. He paid $9400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 45.3522% b) 41.8636% c) 38.375% d) 34.8863%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $40000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 29520.36 b) 27249.56 c) 24978.76 d) 22707.97
13. Problem 13 A bond with a face value of S37000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 29520.36 b) 27249.56 c) 24978.76 d) 22707.97
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4700, and the deal you are offered is the following: You pay $5170 ($4700 plus $470 interest) in 11 equal $470 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $47 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.4809%, APR = 41.7705%, "Effective Yearly Rate = 50.7722% b) Monthly Rate = 3.1328%, APR = 37.5935%, "Effective Yearly Rate = 45.695% c) Monthly Rate = 2.7847%, APR = 33.4164%, "Effective Yearly Rate = 40.6177% d) Monthly Rate = 2.4366%, APR = 29.2394%, "Effective Yearly Rate = 35.5405%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 38
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 38 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4400 now and will need an upgrade at the end of two years, which you expect to be $3600. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 330.7 b) Diff = 297.6 c) Diff = 264.6 d) Diff = 231.5
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 2.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 3%? Show the difference between the two effective interest rates.
a) Diff = -11.19E-05 b) Diff = -10.18E-05 c) Diff = -9.16E-05 d) Diff = -8.14E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 24.5% compounded weekly and checking account interest at 26% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 27.6886%, 29.3334% b) Effective interest rates = 27.4118%, 29.0401% c) Effective interest rates = 27.1349%, 28.7467% d) Effective interest rates = 26.858%, 28.4534%
4. Problem 04
Tom has a bank deposit now worth $1176.25. A year ago, it was $1130. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3382% b) The nominal monthly interest rate = 0.3348% c) The nominal monthly interest rate = 0.3315% d) The nominal monthly interest rate = 0.3281%
5. Problem 05
Mary has 5800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 5940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 5940.63 b) 5940.59 c) 5910.88 d) 5881.18
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €490000 for it. If she waits for one year, she will likely get more, say, €530000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 13% per year, compounded monthly (II) 5% per year, compounded semiannually (III) 9% per year, compounded continuously
a) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months b) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months c) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months d) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 12%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 12% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 10% in the first year, 12% in the second, and 16% in the third. Did you lose out by having locked into the 12% investment? If so, by how much?
a) I = 2035.44, Lost = 59.7 b) I = 2096.77, Lost = 59.75 c) I = 2160.02, Lost = 59.8 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 6188.1 b) 5672.4 c) 5156.7 d) 4641
10. Problem 10
Clarence bought a flat for $450000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5700 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 127.1 months b) 117.3 months c) 107.6 months
d) 97.8 months 11. Problem 11
Clarence paid off an $270000 mortgage completely in 48 months. He paid $9600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 45.5625% b) 42.0577% c) 38.5529% d) 35.0481%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $41000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 24303.89 b) 21873.5 c) 19443.11 d) 17012.72
13. Problem 13 A bond with a face value of S38000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 24303.89 b) 21873.5 c) 19443.11 d) 17012.72
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4800, and the deal you are offered is the following: You pay $5280 ($4800 plus $480 interest) in 11 equal $480 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $48 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 3.4777%, APR = 41.7327%, "Effective Yearly Rate = 50.717% b) Monthly Rate = 3.13%, APR = 37.5594%, "Effective Yearly Rate = 45.6453% c) Monthly Rate = 2.7822%, APR = 33.3861%, "Effective Yearly Rate = 40.5736% d) Monthly Rate = 2.4344%, APR = 29.2129%, "Effective Yearly Rate = 35.5019%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 39
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 39 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $7900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4450 now and will need an upgrade at the end of two years, which you expect to be $3650. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 405.6 b) Diff = 371.8 c) Diff = 338 d) Diff = 304.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 1.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 2%? Show the difference between the two effective interest rates.
a) Diff = -10.15E-05 b) Diff = -9.13E-05 c) Diff = -8.12E-05 d) Diff = -7.1E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 25% compounded weekly and checking account interest at 26.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 28.6089%, 30.2675% b) Effective interest rates = 28.3256%, 29.9678% c) Effective interest rates = 28.0424%, 29.6681% d) Effective interest rates = 27.7591%, 29.3684%
4. Problem 04
Tom has a bank deposit now worth $1186.25. A year ago, it was $1140. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3386% b) The nominal monthly interest rate = 0.3353% c) The nominal monthly interest rate = 0.332% d) The nominal monthly interest rate = 0.3286%
5. Problem 05
Mary has 5900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6040.63 b) 6040.63 c) 6040.59 d) 6010.39
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €500000 for it. If she waits for one year, she will likely get more, say, €541000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 12% per year, compounded monthly (II) 4% per year, compounded semiannually (III) 10% per year, compounded continuously
a) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months b) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months c) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months d) (I) 49.27 months, (II) 94.48 months, (III) 166.36 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 13%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 13% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 11% in the first year, 13% in the second, and 17% in the third. Did you lose out by having locked into the 13% investment? If so, by how much?
a) I = 2096.77, Lost = 59.75 b) I = 2035.44, Lost = 59.7 c) I = 2160.02, Lost = 59.8 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 7816.8 b) 7215.5 c) 6614.2 d) 6012.9
10. Problem 10
Clarence bought a flat for $100000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5800 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 17.8 months b) 16.2 months c) 14.6 months
d) 13 months 11. Problem 11
Clarence paid off an $275000 mortgage completely in 48 months. He paid $9800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 42.2442% b) 38.7239% c) 35.2035% d) 31.6832%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $42000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 25858.93 b) 23273.03 c) 20687.14 d) 18101.25
13. Problem 13 A bond with a face value of S39000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 25858.93 b) 23273.03 c) 20687.14 d) 18101.25
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $4900, and the deal you are offered is the following: You pay $5390 ($4900 plus $490 interest) in 11 equal $490 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $49 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5171%, APR = 54.2053%, "Effective Yearly Rate = 65.8634% b) Monthly Rate = 4.1696%, APR = 50.0356%, "Effective Yearly Rate = 60.797% c) Monthly Rate = 3.8222%, APR = 45.866%, "Effective Yearly Rate = 55.7306% d) Monthly Rate = 3.4747%, APR = 41.6963%, "Effective Yearly Rate = 50.6641%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 40
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 40 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4500 now and will need an upgrade at the end of two years, which you expect to be $3700. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 345.4 b) Diff = 310.9 c) Diff = 276.3 d) Diff = 241.8
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 2.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 3%? Show the difference between the two effective interest rates.
a) Diff = -10.18E-05 b) Diff = -9.16E-05 c) Diff = -8.14E-05 d) Diff = -7.12E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 25.5% compounded weekly and checking account interest at 27% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 29.2554%, 30.911% b) Effective interest rates = 28.9658%, 30.605% c) Effective interest rates = 28.6761%, 30.2989% d) Effective interest rates = 28.3864%, 29.9929%
4. Problem 04
Tom has a bank deposit now worth $1196.25. A year ago, it was $1150. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3324% b) The nominal monthly interest rate = 0.3291% c) The nominal monthly interest rate = 0.3258% d) The nominal monthly interest rate = 0.3225%
5. Problem 05
Mary has 6000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6140.59 b) 6109.89 c) 6079.19 d) 6048.48
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €510000 for it. If she waits for one year, she will likely get more, say, €552000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 11% per year, compounded monthly (II) 5% per year, compounded semiannually (III) 11% per year, compounded continuously
a) (I) 75.96 months, (II) 168.43 months, (III) 75.62 months b) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months c) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months d) (I) 52.33 months, (II) 106.04 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 14%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 14% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 12% in the first year, 14% in the second, and 18% in the third. Did you lose out by having locked into the 14% investment? If so, by how much?
a) I = 2035.44, Lost = 59.7 b) I = 1975.94, Lost = 59.65 c) I = 2096.77, Lost = 59.75 d) I = 2160.02, Lost = 59.8
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 7118 b) 6471 c) 5823.9 d) 5176.8
10. Problem 10
Clarence bought a flat for $110000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $5900 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 17.8 months b) 16 months c) 14.2 months
d) 12.4 months 11. Problem 11
Clarence paid off an $280000 mortgage completely in 48 months. He paid $10000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 35.353% b) 31.8177% c) 28.2824% d) 24.7471%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $43000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 35589.09 b) 32851.47 c) 30113.85 d) 27376.22
13. Problem 13 A bond with a face value of S40000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 35589.09 b) 32851.47 c) 30113.85 d) 27376.22
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5000, and the deal you are offered is the following: You pay $5500 ($5000 plus $500 interest) in 11 equal $500 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $50 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5133%, APR = 54.1599%, "Effective Yearly Rate = 65.7974% b) Monthly Rate = 4.1661%, APR = 49.9938%, "Effective Yearly Rate = 60.736% c) Monthly Rate = 3.819%, APR = 45.8276%, "Effective Yearly Rate = 55.6747% d) Monthly Rate = 3.4718%, APR = 41.6615%, "Effective Yearly Rate = 50.6134%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 41
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 41 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4550 now and will need an upgrade at the end of two years, which you expect to be $3750. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 352.8 b) Diff = 317.5 c) Diff = 282.2 d) Diff = 247
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 3.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 4%? Show the difference between the two effective interest rates.
a) Diff = -13.23E-05 b) Diff = -12.22E-05 c) Diff = -11.2E-05 d) Diff = -10.18E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 26% compounded weekly and checking account interest at 27.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 30.2012%, 31.87% b) Effective interest rates = 29.9051%, 31.5575% c) Effective interest rates = 29.609%, 31.2451% d) Effective interest rates = 29.3129%, 30.9326%
4. Problem 04
Tom has a bank deposit now worth $1206.25. A year ago, it was $1160. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3329% b) The nominal monthly interest rate = 0.3296% c) The nominal monthly interest rate = 0.3263% d) The nominal monthly interest rate = 0.3231%
5. Problem 05
Mary has 6100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6240.63 b) 6240.63 c) 6240.63 d) 6240.59
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €520000 for it. If she waits for one year, she will likely get more, say, €563000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 10% per year, compounded monthly (II) 6% per year, compounded semiannually (III) 12% per year, compounded continuously
a) (I) 83.52 months, (II) 140.7 months, (III) 69.31 months b) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months c) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months d) (I) 55.8 months, (II) 120.89 months, (III) 118.83 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 15%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 15% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 13% in the first year, 15% in the second, and 19% in the third. Did you lose out by having locked into the 15% investment? If so, by how much?
a) I = 1975.94, Lost = 59.65 b) I = 1918.23, Lost = 59.6 c) I = 2035.44, Lost = 59.7 d) I = 2096.77, Lost = 59.75
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 6549.5 b) 5894.5 c) 5239.6 d) 4584.6
10. Problem 10
Clarence bought a flat for $120000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6000 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 21.2 months b) 19.3 months c) 17.3 months
d) 15.4 months 11. Problem 11
Clarence paid off an $285000 mortgage completely in 48 months. He paid $10200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 35.4967% b) 31.9471% c) 28.3974% d) 24.8477%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $44000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 28858.69 b) 25972.82 c) 23086.95 d) 20201.08
13. Problem 13 A bond with a face value of S41000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 28858.69 b) 25972.82 c) 23086.95 d) 20201.08
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5100, and the deal you are offered is the following: You pay $5610 ($5100 plus $510 interest) in 11 equal $510 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $51 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5097%, APR = 54.1163%, "Effective Yearly Rate = 65.734% b) Monthly Rate = 4.1628%, APR = 49.9535%, "Effective Yearly Rate = 60.6775% c) Monthly Rate = 3.8159%, APR = 45.7907%, "Effective Yearly Rate = 55.621% d) Monthly Rate = 3.469%, APR = 41.628%, "Effective Yearly Rate = 50.5646%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 42
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 42 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4600 now and will need an upgrade at the end of two years, which you expect to be $3800. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 432.1 b) Diff = 396.1 c) Diff = 360.1 d) Diff = 324.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 4.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 5%? Show the difference between the two effective interest rates.
a) Diff = -12.18E-05 b) Diff = -11.17E-05 c) Diff = -10.15E-05 d) Diff = -9.14E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 26.5% compounded weekly and checking account interest at 28% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 30.8605%, 32.5258% b) Effective interest rates = 30.558%, 32.2069% c) Effective interest rates = 30.2554%, 31.8881% d) Effective interest rates = 29.9529%, 31.5692%
4. Problem 04
Tom has a bank deposit now worth $1216.25. A year ago, it was $1170. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3301% b) The nominal monthly interest rate = 0.3268% c) The nominal monthly interest rate = 0.3236% d) The nominal monthly interest rate = 0.3204%
5. Problem 05
Mary has 6200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6340.63 b) 6340.6 c) 6308.89 d) 6277.19
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €530000 for it. If she waits for one year, she will likely get more, say, €574000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 9% per year, compounded monthly (II) 7% per year, compounded semiannually (III) 13% per year, compounded continuously
a) (I) 92.77 months, (II) 120.89 months, (III) 63.98 months b) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months c) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months d) (I) 59.76 months, (II) 140.7 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 16%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 16% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 14% in the first year, 16% in the second, and 20% in the third. Did you lose out by having locked into the 16% investment? If so, by how much?
a) I = 1918.23, Lost = 59.6 b) I = 1862.25, Lost = 59.55 c) I = 1975.94, Lost = 59.65 d) I = 2035.44, Lost = 59.7
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 6893.1 b) 6266.4 c) 5639.8 d) 5013.1
10. Problem 10
Clarence bought a flat for $130000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6100 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 24.9 months b) 22.8 months c) 20.8 months
d) 18.7 months 11. Problem 11
Clarence paid off an $290000 mortgage completely in 48 months. He paid $10400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 46.3257% b) 42.7622% c) 39.1987% d) 35.6352%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $45000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 36370.79 b) 33339.89 c) 30308.99 d) 27278.09
13. Problem 13 A bond with a face value of S42000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 36370.79 b) 33339.89 c) 30308.99 d) 27278.09
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5200, and the deal you are offered is the following: You pay $5720 ($5200 plus $520 interest) in 11 equal $520 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $52 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5062%, APR = 54.0744%, "Effective Yearly Rate = 65.673% b) Monthly Rate = 4.1596%, APR = 49.9149%, "Effective Yearly Rate = 60.6212% c) Monthly Rate = 3.8129%, APR = 45.7553%, "Effective Yearly Rate = 55.5694% d) Monthly Rate = 3.4663%, APR = 41.5957%, "Effective Yearly Rate = 50.5177%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 43
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 43 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4650 now and will need an upgrade at the end of two years, which you expect to be $3850. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 367.5 b) Diff = 330.8 c) Diff = 294 d) Diff = 257.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 5.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 6%? Show the difference between the two effective interest rates.
a) Diff = -10.09E-05 b) Diff = -9.08E-05 c) Diff = -8.08E-05 d) Diff = -7.07E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 27% compounded weekly and checking account interest at 28.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 31.5231%, 33.1846% b) Effective interest rates = 31.214%, 32.8592% c) Effective interest rates = 30.905%, 32.5339% d) Effective interest rates = 30.5959%, 32.2086%
4. Problem 04
Tom has a bank deposit now worth $1226.25. A year ago, it was $1180. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3209% b) The nominal monthly interest rate = 0.3177% c) The nominal monthly interest rate = 0.3145% d) The nominal monthly interest rate = 0.3113%
5. Problem 05
Mary has 6300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6440.63 b) 6440.63 c) 6440.6 d) 6408.4
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €540000 for it. If she waits for one year, she will likely get more, say, €585000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 8% per year, compounded monthly (II) 8% per year, compounded semiannually (III) 14% per year, compounded continuously
a) (I) 104.32 months, (II) 106.04 months, (III) 59.41 months b) (I) 75.96 months, (II) 168.43 months, (III) 75.62 months c) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months d) (I) 64.33 months, (II) 168.43 months, (III) 92.42 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 3%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 3% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 1% in the first year, 3% in the second, and 7% in the third. Did you lose out by having locked into the 3% investment? If so, by how much?
a) I = 1862.25, Lost = 59.55 b) I = 2742.1, Lost = 60.2 c) I = 1918.23, Lost = 59.6 d) I = 1975.94, Lost = 59.65
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 5638.8 b) 5074.9 c) 4511 d) 3947.2
10. Problem 10
Clarence bought a flat for $140000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6200 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 28.9 months b) 26.6 months c) 24.4 months
d) 22.2 months 11. Problem 11
Clarence paid off an $295000 mortgage completely in 48 months. He paid $10600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 42.9223% b) 39.3454% c) 35.7686% d) 32.1917%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $46000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 41248.48 b) 38075.52 c) 34902.56 d) 31729.6
13. Problem 13 A bond with a face value of S43000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 41248.48 b) 38075.52 c) 34902.56 d) 31729.6
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5300, and the deal you are offered is the following: You pay $5830 ($5300 plus $530 interest) in 11 equal $530 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $53 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.5028%, APR = 54.0341%, "Effective Yearly Rate = 65.6143% b) Monthly Rate = 4.1565%, APR = 49.8776%, "Effective Yearly Rate = 60.5671% c) Monthly Rate = 3.8101%, APR = 45.7212%, "Effective Yearly Rate = 55.5198% d) Monthly Rate = 3.4637%, APR = 41.5647%, "Effective Yearly Rate = 50.4726%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 44
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 44 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4700 now and will need an upgrade at the end of two years, which you expect to be $3900. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 412.4 b) Diff = 374.9 c) Diff = 337.4 d) Diff = 299.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 6.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 7%? Show the difference between the two effective interest rates.
a) Diff = -13.01E-05 b) Diff = -12.01E-05 c) Diff = -11.01E-05 d) Diff = -10E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 27.5% compounded weekly and checking account interest at 29% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 32.1889%, 33.8463% b) Effective interest rates = 31.8733%, 33.5145% c) Effective interest rates = 31.5577%, 33.1826% d) Effective interest rates = 31.2421%, 32.8508%
4. Problem 04
Tom has a bank deposit now worth $1236.25. A year ago, it was $1190. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3278% b) The nominal monthly interest rate = 0.3246% c) The nominal monthly interest rate = 0.3214% d) The nominal monthly interest rate = 0.3182%
5. Problem 05
Mary has 6400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6540.63 b) 6540.63 c) 6540.6 d) 6507.9
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €550000 for it. If she waits for one year, she will likely get more, say, €596000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 7% per year, compounded monthly (II) 9% per year, compounded semiannually (III) 15% per year, compounded continuously
a) (I) 119.17 months, (II) 94.48 months, (III) 55.45 months b) (I) 83.52 months, (II) 140.7 months, (III) 69.31 months c) (I) 75.96 months, (II) 168.43 months, (III) 75.62 months d) (I) 69.66 months, (II) 210.02 months, (III) 83.18 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 4%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 4% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 2% in the first year, 4% in the second, and 8% in the third. Did you lose out by having locked into the 4% investment? If so, by how much?
a) I = 2742.1, Lost = 60.2 b) I = 2661.29, Lost = 60.15 c) I = 1862.25, Lost = 59.55 d) I = 1918.23, Lost = 59.6
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 6087.9 b) 5619.6 c) 5151.3 d) 4683
10. Problem 10
Clarence bought a flat for $150000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6300 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 26 months b) 23.6 months c) 21.3 months
d) 18.9 months 11. Problem 11
Clarence paid off an $300000 mortgage completely in 48 months. He paid $10800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 43.0705% b) 39.4813% c) 35.8921% d) 32.3029%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $47000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 39747.36 b) 36435.08 c) 33122.8 d) 29810.52
13. Problem 13 A bond with a face value of S44000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 39747.36 b) 36435.08 c) 33122.8 d) 29810.52
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5400, and the deal you are offered is the following: You pay $5940 ($5400 plus $540 interest) in 11 equal $540 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $54 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4996%, APR = 53.9953%, "Effective Yearly Rate = 65.5578% b) Monthly Rate = 4.1535%, APR = 49.8418%, "Effective Yearly Rate = 60.5149% c) Monthly Rate = 3.8074%, APR = 45.6883%, "Effective Yearly Rate = 55.472% d) Monthly Rate = 3.4612%, APR = 41.5348%, "Effective Yearly Rate = 50.4291%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 45
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 45 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4750 now and will need an upgrade at the end of two years, which you expect to be $3950. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 496.9 b) Diff = 458.6 c) Diff = 420.4 d) Diff = 382.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 7.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 8%? Show the difference between the two effective interest rates.
a) Diff = -12.85E-05 b) Diff = -11.86E-05 c) Diff = -10.87E-05 d) Diff = -9.88E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 28% compounded weekly and checking account interest at 29.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 33.18%, 34.8493% b) Effective interest rates = 32.8579%, 34.511% c) Effective interest rates = 32.5358%, 34.1726% d) Effective interest rates = 32.2136%, 33.8343%
4. Problem 04
Tom has a bank deposit now worth $1246.25. A year ago, it was $1200. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3251% b) The nominal monthly interest rate = 0.322% c) The nominal monthly interest rate = 0.3188% d) The nominal monthly interest rate = 0.3156%
5. Problem 05
Mary has 6500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6640.6 b) 6607.4 c) 6574.2 d) 6540.99
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €560000 for it. If she waits for one year, she will likely get more, say, €607000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 6% per year, compounded monthly (II) 10% per year, compounded semiannually (III) 16% per year, compounded continuously
a) (I) 138.98 months, (II) 85.24 months, (III) 51.99 months b) (I) 92.77 months, (II) 120.89 months, (III) 63.98 months c) (I) 83.52 months, (II) 140.7 months, (III) 69.31 months d) (I) 75.96 months, (II) 168.43 months, (III) 75.62 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 5%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 5% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 3% in the first year, 5% in the second, and 9% in the third. Did you lose out by having locked into the 5% investment? If so, by how much?
a) I = 2661.29, Lost = 60.15 b) I = 2582.93, Lost = 60.1 c) I = 2742.1, Lost = 60.2 d) I = 1862.25, Lost = 59.55
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 8% compounded monthly, how much money is being lent?
a) 4097.7 b) 3756.2 c) 3414.7 d) 3073.2
10. Problem 10
Clarence bought a flat for $160000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6400 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 32.5 months b) 30 months c) 27.5 months
d) 25 months 11. Problem 11
Clarence paid off an $305000 mortgage completely in 48 months. He paid $11000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 46.8257% b) 43.2237% c) 39.6218% d) 36.0198%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $48000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 34490.66 b) 31041.59 c) 27592.53 d) 24143.46
13. Problem 13 A bond with a face value of S45000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 34490.66 b) 31041.59 c) 27592.53 d) 24143.46
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5500, and the deal you are offered is the following: You pay $6050 ($5500 plus $550 interest) in 11 equal $550 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $55 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4965%, APR = 53.9578%, "Effective Yearly Rate = 65.5034% b) Monthly Rate = 4.1506%, APR = 49.8072%, "Effective Yearly Rate = 60.4647% c) Monthly Rate = 3.8047%, APR = 45.6566%, "Effective Yearly Rate = 55.426% d) Monthly Rate = 3.4588%, APR = 41.506%, "Effective Yearly Rate = 50.3872%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 46
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 46 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4800 now and will need an upgrade at the end of two years, which you expect to be $4000. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 389.6 b) Diff = 350.6 c) Diff = 311.7 d) Diff = 272.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 8.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 9%? Show the difference between the two effective interest rates.
a) Diff = -11.67E-05 b) Diff = -10.7E-05 c) Diff = -9.73E-05 d) Diff = -8.75E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 28.5% compounded weekly and checking account interest at 30% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 33.5302%, 35.1787% b) Effective interest rates = 33.2015%, 34.8338% c) Effective interest rates = 32.8728%, 34.4889% d) Effective interest rates = 32.544%, 34.144%
4. Problem 04
Tom has a bank deposit now worth $1256.25. A year ago, it was $1210. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3162% b) The nominal monthly interest rate = 0.3131% c) The nominal monthly interest rate = 0.3099% d) The nominal monthly interest rate = 0.3068%
5. Problem 05
Mary has 6600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6740.63 b) 6740.61 c) 6706.9 d) 6673.2
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €570000 for it. If she waits for one year, she will likely get more, say, €618000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 5% per year, compounded monthly (II) 11% per year, compounded semiannually (III) 17% per year, compounded continuously
a) (I) 166.7 months, (II) 77.68 months, (III) 48.93 months b) (I) 104.32 months, (II) 106.04 months, (III) 59.41 months c) (I) 92.77 months, (II) 120.89 months, (III) 63.98 months d) (I) 83.52 months, (II) 140.7 months, (III) 69.31 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 6%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 6% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 4% in the first year, 6% in the second, and 10% in the third. Did you lose out by having locked into the 6% investment? If so, by how much?
a) I = 2582.93, Lost = 60.1 b) I = 2506.93, Lost = 60.05 c) I = 2661.29, Lost = 60.15 d) I = 2742.1, Lost = 60.2
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 4302.8 b) 3911.6 c) 3520.5 d) 3129.3
10. Problem 10
Clarence bought a flat for $170000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6500 per month at 6% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 34.2 months b) 31.6 months c) 29 months
d) 26.3 months 11. Problem 11
Clarence paid off an $310000 mortgage completely in 48 months. He paid $11200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 36.1431% b) 32.5288% c) 28.9145% d) 25.3002%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 17% compounded semiannually, and a bond maturing in 15 years with a face value of $49000 and a coupon rate of 12%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 39418.63 b) 35835.12 c) 32251.6 d) 28668.09
13. Problem 13 A bond with a face value of S46000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 39418.63 b) 35835.12 c) 32251.6 d) 28668.09
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5600, and the deal you are offered is the following: You pay $6160 ($5600 plus $560 interest) in 11 equal $560 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $56 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4935%, APR = 53.9217%, "Effective Yearly Rate = 65.4509% b) Monthly Rate = 4.1478%, APR = 49.7739%, "Effective Yearly Rate = 60.4162% c) Monthly Rate = 3.8022%, APR = 45.6261%, "Effective Yearly Rate = 55.3816% d) Monthly Rate = 3.4565%, APR = 41.4782%, "Effective Yearly Rate = 50.3469%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 47
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 47 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4850 now and will need an upgrade at the end of two years, which you expect to be $4050. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 516.1 b) Diff = 476.4 c) Diff = 436.7 d) Diff = 397
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 9.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 10%? Show the difference between the two effective interest rates.
a) Diff = -12.4E-05 b) Diff = -11.45E-05 c) Diff = -10.49E-05 d) Diff = -9.54E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 29% compounded weekly and checking account interest at 30.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 33.5351%, 35.1464% b) Effective interest rates = 33.1998%, 34.7949% c) Effective interest rates = 32.8644%, 34.4435% d) Effective interest rates = 32.5291%, 34.092%
4. Problem 04
Tom has a bank deposit now worth $1266.25. A year ago, it was $1220. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3106% b) The nominal monthly interest rate = 0.3074% c) The nominal monthly interest rate = 0.3043% d) The nominal monthly interest rate = 0.3012%
5. Problem 05
Mary has 6700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6840.63 b) 6840.61 c) 6806.4 d) 6772.2
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €580000 for it. If she waits for one year, she will likely get more, say, €629000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 4% per year, compounded monthly (II) 12% per year, compounded semiannually (III) 18% per year, compounded continuously
a) (I) 208.29 months, (II) 71.37 months, (III) 46.21 months b) (I) 119.17 months, (II) 94.48 months, (III) 55.45 months c) (I) 104.32 months, (II) 106.04 months, (III) 59.41 months d) (I) 92.77 months, (II) 120.89 months, (III) 63.98 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 7%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 7% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 5% in the first year, 7% in the second, and 11% in the third. Did you lose out by having locked into the 7% investment? If so, by how much?
a) I = 2506.93, Lost = 60.05 b) I = 2433.24, Lost = 60 c) I = 2582.93, Lost = 60.1 d) I = 2661.29, Lost = 60.15
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 6259.1 b) 5737.5 c) 5215.9 d) 4694.3
10. Problem 10
Clarence bought a flat for $180000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6600 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 32.4 months b) 29.7 months c) 27 months
d) 24.3 months 11. Problem 11
Clarence paid off an $315000 mortgage completely in 48 months. He paid $11400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 39.8884% b) 36.2622% c) 32.636% d) 29.0098%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 18% compounded semiannually, and a bond maturing in 15 years with a face value of $50000 and a coupon rate of 13%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 40873.73 b) 37157.93 c) 33442.14 d) 29726.35
13. Problem 13 A bond with a face value of S47000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 40873.73 b) 37157.93 c) 33442.14 d) 29726.35
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5700, and the deal you are offered is the following: You pay $6270 ($5700 plus $570 interest) in 11 equal $570 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $57 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4906%, APR = 53.8869%, "Effective Yearly Rate = 65.4003% b) Monthly Rate = 4.1451%, APR = 49.7417%, "Effective Yearly Rate = 60.3695% c) Monthly Rate = 3.7997%, APR = 45.5966%, "Effective Yearly Rate = 55.3387% d) Monthly Rate = 3.4543%, APR = 41.4514%, "Effective Yearly Rate = 50.3079%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 48
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 48 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4900 now and will need an upgrade at the end of two years, which you expect to be $4100. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 444.8 b) Diff = 404.4 c) Diff = 364 d) Diff = 323.5
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 10.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 11%? Show the difference between the two effective interest rates.
a) Diff = -11.17E-05 b) Diff = -10.24E-05 c) Diff = -9.31E-05 d) Diff = -8.38E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 29.5% compounded weekly and checking account interest at 31% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 34.2007%, 35.8069% b) Effective interest rates = 33.8587%, 35.4488% c) Effective interest rates = 33.5167%, 35.0907% d) Effective interest rates = 33.1747%, 34.7326%
4. Problem 04
Tom has a bank deposit now worth $1276.25. A year ago, it was $1230. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3142% b) The nominal monthly interest rate = 0.3112% c) The nominal monthly interest rate = 0.3081% d) The nominal monthly interest rate = 0.305%
5. Problem 05
Mary has 6800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 6940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 6940.61 b) 6905.91 c) 6871.2 d) 6836.5
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €590000 for it. If she waits for one year, she will likely get more, say, €640000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 3% per year, compounded monthly (II) 13% per year, compounded semiannually (III) 19% per year, compounded continuously
a) (I) 277.61 months, (II) 66.04 months, (III) 43.78 months b) (I) 138.98 months, (II) 85.24 months, (III) 51.99 months c) (I) 119.17 months, (II) 94.48 months, (III) 55.45 months d) (I) 104.32 months, (II) 106.04 months, (III) 59.41 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 8%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 8% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 6% in the first year, 8% in the second, and 12% in the third. Did you lose out by having locked into the 8% investment? If so, by how much?
a) I = 2433.24, Lost = 60 b) I = 2361.76, Lost = 59.95 c) I = 2506.93, Lost = 60.05 d) I = 2582.93, Lost = 60.1
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 7327.6 b) 6717 c) 6106.4 d) 5495.7
10. Problem 10
Clarence bought a flat for $190000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6700 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 28.2 months b) 25.4 months c) 22.6 months
d) 19.7 months 11. Problem 11
Clarence paid off an $320000 mortgage completely in 48 months. He paid $11600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 43.6528% b) 40.0151% c) 36.3774% d) 32.7396%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $51000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 37638.45 b) 34743.19 c) 31847.92 d) 28952.66
13. Problem 13 A bond with a face value of S48000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 37638.45 b) 34743.19 c) 31847.92 d) 28952.66
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5800, and the deal you are offered is the following: You pay $6380 ($5800 plus $580 interest) in 11 equal $580 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $58 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4878%, APR = 53.8532%, "Effective Yearly Rate = 65.3514% b) Monthly Rate = 4.1426%, APR = 49.7107%, "Effective Yearly Rate = 60.3244% c) Monthly Rate = 3.7973%, APR = 45.5681%, "Effective Yearly Rate = 55.2973% d) Monthly Rate = 3.4521%, APR = 41.4255%, "Effective Yearly Rate = 50.2703%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 49
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 49 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $8900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $4950 now and will need an upgrade at the end of two years, which you expect to be $4150. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 411.7 b) Diff = 370.5 c) Diff = 329.4 d) Diff = 288.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 11.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 12%? Show the difference between the two effective interest rates.
a) Diff = -9.96E-05 b) Diff = -9.05E-05 c) Diff = -8.15E-05 d) Diff = -7.24E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 30% compounded weekly and checking account interest at 31.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 34.8696%, 36.4703% b) Effective interest rates = 34.5209%, 36.1056% c) Effective interest rates = 34.1722%, 35.7409% d) Effective interest rates = 33.8235%, 35.3762%
4. Problem 04
Tom has a bank deposit now worth $1286.25. A year ago, it was $1240. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3117% b) The nominal monthly interest rate = 0.3087% c) The nominal monthly interest rate = 0.3056% d) The nominal monthly interest rate = 0.3026%
5. Problem 05
Mary has 6900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7040.63 b) 7040.63 c) 7040.63 d) 7040.61
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €600000 for it. If she waits for one year, she will likely get more, say, €651000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 2% per year, compounded monthly (II) 14% per year, compounded semiannually (III) 20% per year, compounded continuously
a) (I) 416.23 months, (II) 61.47 months, (III) 41.59 months b) (I) 166.7 months, (II) 77.68 months, (III) 48.93 months c) (I) 138.98 months, (II) 85.24 months, (III) 51.99 months d) (I) 119.17 months, (II) 94.48 months, (III) 55.45 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 9%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 9% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 7% in the first year, 9% in the second, and 13% in the third. Did you lose out by having locked into the 9% investment? If so, by how much?
a) I = 2361.76, Lost = 59.95 b) I = 2292.45, Lost = 59.9 c) I = 2433.24, Lost = 60 d) I = 2506.93, Lost = 60.05
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 8576.9 b) 7917.1 c) 7257.4 d) 6597.6
10. Problem 10
Clarence bought a flat for $200000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6800 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 38.2 months b) 35.3 months c) 32.3 months
d) 29.4 months 11. Problem 11
Clarence paid off an $325000 mortgage completely in 48 months. He paid $11800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 36.4887% b) 32.8399% c) 29.191% d) 25.5421%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $52000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 36989.33 b) 33906.89 c) 30824.44 d) 27742
13. Problem 13 A bond with a face value of S49000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 36989.33 b) 33906.89 c) 30824.44 d) 27742
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $5900, and the deal you are offered is the following: You pay $6490 ($5900 plus $590 interest) in 11 equal $590 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $59 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4851%, APR = 53.8207%, "Effective Yearly Rate = 65.3042% b) Monthly Rate = 4.1401%, APR = 49.6806%, "Effective Yearly Rate = 60.2808% c) Monthly Rate = 3.795%, APR = 45.5406%, "Effective Yearly Rate = 55.2574% d) Monthly Rate = 3.45%, APR = 41.4005%, "Effective Yearly Rate = 50.234%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 50
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 50 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5000 now and will need an upgrade at the end of two years, which you expect to be $4200. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 461 b) Diff = 419.1 c) Diff = 377.2 d) Diff = 335.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 12.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 13%? Show the difference between the two effective interest rates.
a) Diff = -10.5E-05 b) Diff = -9.63E-05 c) Diff = -8.75E-05 d) Diff = -7.88E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 30.5% compounded weekly and checking account interest at 32% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 36.2525%, 37.8794% b) Effective interest rates = 35.8971%, 37.508% c) Effective interest rates = 35.5417%, 37.1367% d) Effective interest rates = 35.1863%, 36.7653%
4. Problem 04
Tom has a bank deposit now worth $1296.25. A year ago, it was $1250. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3063% b) The nominal monthly interest rate = 0.3032% c) The nominal monthly interest rate = 0.3002% d) The nominal monthly interest rate = 0.2972%
5. Problem 05
Mary has 7000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7140.63 b) 7140.63 c) 7140.63 d) 7140.61
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €610000 for it. If she waits for one year, she will likely get more, say, €662000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 1% per year, compounded monthly (II) 15% per year, compounded semiannually (III) 18% per year, compounded continuously
a) (I) 832.12 months, (II) 57.51 months, (III) 46.21 months b) (I) 208.29 months, (II) 71.37 months, (III) 46.21 months c) (I) 166.7 months, (II) 77.68 months, (III) 48.93 months d) (I) 138.98 months, (II) 85.24 months, (III) 51.99 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 10%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 10% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 8% in the first year, 10% in the second, and 14% in the third. Did you lose out by having locked into the 10% investment? If so, by how much?
a) I = 2292.45, Lost = 59.9 b) I = 2225.22, Lost = 59.85 c) I = 2361.76, Lost = 59.95 d) I = 2433.24, Lost = 60
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 7374.3 b) 6703.9 c) 6033.5 d) 5363.1
10. Problem 10
Clarence bought a flat for $210000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $6900 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 33.6 months b) 30.5 months c) 27.5 months
d) 24.4 months 11. Problem 11
Clarence paid off an $330000 mortgage completely in 48 months. He paid $12000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 43.9158% b) 40.2562% c) 36.5965% d) 32.9369%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $53000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 39157.8 b) 35894.65 c) 32631.5 d) 29368.35
13. Problem 13 A bond with a face value of S50000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 39157.8 b) 35894.65 c) 32631.5 d) 29368.35
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6000, and the deal you are offered is the following: You pay $6600 ($6000 plus $600 interest) in 11 equal $600 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $60 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4824%, APR = 53.7893%, "Effective Yearly Rate = 65.2585% b) Monthly Rate = 4.1376%, APR = 49.6516%, "Effective Yearly Rate = 60.2386% c) Monthly Rate = 3.7928%, APR = 45.514%, "Effective Yearly Rate = 55.2188% d) Monthly Rate = 3.448%, APR = 41.3764%, "Effective Yearly Rate = 50.1989%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 51
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 51 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5050 now and will need an upgrade at the end of two years, which you expect to be $4250. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 469.2 b) Diff = 426.5 c) Diff = 383.9 d) Diff = 341.2
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 13.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 14%? Show the difference between the two effective interest rates.
a) Diff = -9.26E-05 b) Diff = -8.41E-05 c) Diff = -7.57E-05 d) Diff = -6.73E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 31% compounded weekly and checking account interest at 32.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 36.9414%, 38.5621% b) Effective interest rates = 36.5793%, 38.1841% c) Effective interest rates = 36.2171%, 37.806% d) Effective interest rates = 35.8549%, 37.428%
4. Problem 04
Tom has a bank deposit now worth $1306.25. A year ago, it was $1260. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3099% b) The nominal monthly interest rate = 0.3069% c) The nominal monthly interest rate = 0.3039% d) The nominal monthly interest rate = 0.3009%
5. Problem 05
Mary has 7100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7240.63 b) 7240.61 c) 7204.41 d) 7168.21
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €620000 for it. If she waits for one year, she will likely get more, say, €673000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 2% per year, compounded monthly (II) 16% per year, compounded semiannually (III) 16% per year, compounded continuously
a) (I) 416.23 months, (II) 54.04 months, (III) 51.99 months b) (I) 277.61 months, (II) 66.04 months, (III) 43.78 months c) (I) 208.29 months, (II) 71.37 months, (III) 46.21 months d) (I) 166.7 months, (II) 77.68 months, (III) 48.93 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 11%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 11% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 9% in the first year, 11% in the second, and 15% in the third. Did you lose out by having locked into the 11% investment? If so, by how much?
a) I = 2225.22, Lost = 59.85 b) I = 2160.02, Lost = 59.8 c) I = 2292.45, Lost = 59.9 d) I = 2361.76, Lost = 59.95
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 8370.8 b) 7726.9 c) 7083 d) 6439.1
10. Problem 10
Clarence bought a flat for $220000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7000 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 41.2 months b) 38 months c) 34.8 months
d) 31.7 months 11. Problem 11
Clarence paid off an $335000 mortgage completely in 48 months. He paid $12200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 47.7111% b) 44.041% c) 40.3709% d) 36.7008%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $54000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 44693.28 b) 41255.33 c) 37817.39 d) 34379.44
13. Problem 13 A bond with a face value of S51000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 44693.28 b) 41255.33 c) 37817.39 d) 34379.44
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6100, and the deal you are offered is the following: You pay $6710 ($6100 plus $610 interest) in 11 equal $610 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $61 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4799%, APR = 53.7588%, "Effective Yearly Rate = 65.2144% b) Monthly Rate = 4.1353%, APR = 49.6235%, "Effective Yearly Rate = 60.1979% c) Monthly Rate = 3.7907%, APR = 45.4883%, "Effective Yearly Rate = 55.1814% d) Monthly Rate = 3.4461%, APR = 41.353%, "Effective Yearly Rate = 50.1649%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 52
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 52 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5100 now and will need an upgrade at the end of two years, which you expect to be $4300. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 477.2 b) Diff = 433.8 c) Diff = 390.4 d) Diff = 347
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 14.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 15%? Show the difference between the two effective interest rates.
a) Diff = -9.65E-05 b) Diff = -8.84E-05 c) Diff = -8.04E-05 d) Diff = -7.23E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 31.5% compounded weekly and checking account interest at 33% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 37.2647%, 38.8632% b) Effective interest rates = 36.8958%, 38.4784% c) Effective interest rates = 36.5268%, 38.0936% d) Effective interest rates = 36.1579%, 37.7088%
4. Problem 04
Tom has a bank deposit now worth $1316.25. A year ago, it was $1270. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3075% b) The nominal monthly interest rate = 0.3045% c) The nominal monthly interest rate = 0.3015% d) The nominal monthly interest rate = 0.2985%
5. Problem 05
Mary has 7200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7340.63 b) 7340.63 c) 7340.62 d) 7303.91
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €630000 for it. If she waits for one year, she will likely get more, say, €684000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 3% per year, compounded monthly (II) 17% per year, compounded semiannually (III) 14% per year, compounded continuously
a) (I) 277.61 months, (II) 50.98 months, (III) 59.41 months b) (I) 416.23 months, (II) 61.47 months, (III) 41.59 months c) (I) 277.61 months, (II) 66.04 months, (III) 43.78 months d) (I) 208.29 months, (II) 71.37 months, (III) 46.21 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 12%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 12% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 10% in the first year, 12% in the second, and 16% in the third. Did you lose out by having locked into the 12% investment? If so, by how much?
a) I = 2160.02, Lost = 59.8 b) I = 2096.77, Lost = 59.75 c) I = 2225.22, Lost = 59.85 d) I = 2292.45, Lost = 59.9
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 5816.5 b) 5234.8 c) 4653.2 d) 4071.5
10. Problem 10
Clarence bought a flat for $230000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7100 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 32.8 months b) 29.5 months c) 26.2 months
d) 22.9 months 11. Problem 11
Clarence paid off an $340000 mortgage completely in 48 months. He paid $12400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.4821% b) 36.8019% c) 33.1217% d) 29.4415%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $55000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 39680.69 b) 36073.36 c) 32466.02 d) 28858.69
13. Problem 13 A bond with a face value of S52000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 39680.69 b) 36073.36 c) 32466.02 d) 28858.69
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6200, and the deal you are offered is the following: You pay $6820 ($6200 plus $620 interest) in 11 equal $620 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $62 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4775%, APR = 53.7294%, "Effective Yearly Rate = 65.1717% b) Monthly Rate = 4.133%, APR = 49.5964%, "Effective Yearly Rate = 60.1585% c) Monthly Rate = 3.7886%, APR = 45.4633%, "Effective Yearly Rate = 55.1452% d) Monthly Rate = 3.4442%, APR = 41.3303%, "Effective Yearly Rate = 50.132%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 53
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 53 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5150 now and will need an upgrade at the end of two years, which you expect to be $4350. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 529.4 b) Diff = 485.3 c) Diff = 441.2 d) Diff = 397.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 15.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 16%? Show the difference between the two effective interest rates.
a) Diff = -8.38E-05 b) Diff = -7.62E-05 c) Diff = -6.86E-05 d) Diff = -6.1E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 32% compounded weekly and checking account interest at 33.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 37.5778%, 39.1537% b) Effective interest rates = 37.202%, 38.7622% c) Effective interest rates = 36.8262%, 38.3707% d) Effective interest rates = 36.4505%, 37.9791%
4. Problem 04
Tom has a bank deposit now worth $1326.25. A year ago, it was $1280. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3022% b) The nominal monthly interest rate = 0.2992% c) The nominal monthly interest rate = 0.2962% d) The nominal monthly interest rate = 0.2933%
5. Problem 05
Mary has 7300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7440.63 b) 7440.62 c) 7403.41 d) 7366.21
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €640000 for it. If she waits for one year, she will likely get more, say, €695000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 4% per year, compounded monthly (II) 18% per year, compounded semiannually (III) 12% per year, compounded continuously
a) (I) 208.29 months, (II) 48.26 months, (III) 69.31 months b) (I) 832.12 months, (II) 57.51 months, (III) 46.21 months c) (I) 416.23 months, (II) 61.47 months, (III) 41.59 months d) (I) 277.61 months, (II) 66.04 months, (III) 43.78 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 13%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 13% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 11% in the first year, 13% in the second, and 17% in the third. Did you lose out by having locked into the 13% investment? If so, by how much?
a) I = 2096.77, Lost = 59.75 b) I = 2035.44, Lost = 59.7 c) I = 2160.02, Lost = 59.8 d) I = 2225.22, Lost = 59.85
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 6303.7 b) 5818.8 c) 5333.9 d) 4849
10. Problem 10
Clarence bought a flat for $240000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7200 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 33.8 months b) 30.4 months c) 27.1 months
d) 23.7 months 11. Problem 11
Clarence paid off an $345000 mortgage completely in 48 months. He paid $12600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 36.8999% b) 33.2099% c) 29.5199% d) 25.8299%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $56000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 37717.85 b) 33946.07 c) 30174.28 d) 26402.5
13. Problem 13 A bond with a face value of S53000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 37717.85 b) 33946.07 c) 30174.28 d) 26402.5
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6300, and the deal you are offered is the following: You pay $6930 ($6300 plus $630 interest) in 11 equal $630 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $63 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4751%, APR = 53.7009%, "Effective Yearly Rate = 65.1303% b) Monthly Rate = 4.1308%, APR = 49.5701%, "Effective Yearly Rate = 60.1203% c) Monthly Rate = 3.7866%, APR = 45.4392%, "Effective Yearly Rate = 55.1102% d) Monthly Rate = 3.4424%, APR = 41.3084%, "Effective Yearly Rate = 50.1002%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 54
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 54 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5200 now and will need an upgrade at the end of two years, which you expect to be $4400. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 448.6 b) Diff = 403.7 c) Diff = 358.9 d) Diff = 314
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 16.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 17%? Show the difference between the two effective interest rates.
a) Diff = -7.16E-05 b) Diff = -6.45E-05 c) Diff = -5.73E-05 d) Diff = -5.01E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 32.5% compounded weekly and checking account interest at 34% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 39.411%, 41.0271% b) Effective interest rates = 39.0284%, 40.6288% c) Effective interest rates = 38.6458%, 40.2304% d) Effective interest rates = 38.2632%, 39.8321%
4. Problem 04
Tom has a bank deposit now worth $1336.25. A year ago, it was $1290. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2999% b) The nominal monthly interest rate = 0.2969% c) The nominal monthly interest rate = 0.294% d) The nominal monthly interest rate = 0.291%
5. Problem 05
Mary has 7400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7540.63 b) 7540.63 c) 7540.62 d) 7502.92
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €650000 for it. If she waits for one year, she will likely get more, say, €706000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 5% per year, compounded monthly (II) 19% per year, compounded semiannually (III) 10% per year, compounded continuously
a) (I) 166.7 months, (II) 45.83 months, (III) 83.18 months b) (I) 416.23 months, (II) 54.04 months, (III) 51.99 months c) (I) 832.12 months, (II) 57.51 months, (III) 46.21 months d) (I) 416.23 months, (II) 61.47 months, (III) 41.59 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 14%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 14% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 12% in the first year, 14% in the second, and 18% in the third. Did you lose out by having locked into the 14% investment? If so, by how much?
a) I = 2035.44, Lost = 59.7 b) I = 1975.94, Lost = 59.65 c) I = 2096.77, Lost = 59.75 d) I = 2160.02, Lost = 59.8
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 6% compounded monthly, how much money is being lent?
a) 4258.9 b) 3904 c) 3549.1 d) 3194.2
10. Problem 10
Clarence bought a flat for $250000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7300 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 41.9 months b) 38.4 months c) 34.9 months
d) 31.4 months 11. Problem 11
Clarence paid off an $350000 mortgage completely in 48 months. He paid $12800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.6727% b) 36.9752% c) 33.2777% d) 29.5802%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $57000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 51112.25 b) 47180.54 c) 43248.83 d) 39317.12
13. Problem 13 A bond with a face value of S54000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 51112.25 b) 47180.54 c) 43248.83 d) 39317.12
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6400, and the deal you are offered is the following: You pay $7040 ($6400 plus $640 interest) in 11 equal $640 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $64 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4728%, APR = 53.6733%, "Effective Yearly Rate = 65.0902% b) Monthly Rate = 4.1287%, APR = 49.5446%, "Effective Yearly Rate = 60.0833% c) Monthly Rate = 3.7847%, APR = 45.4159%, "Effective Yearly Rate = 55.0763% d) Monthly Rate = 3.4406%, APR = 41.2871%, "Effective Yearly Rate = 50.0694%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 55
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 55 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5250 now and will need an upgrade at the end of two years, which you expect to be $4450. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 455.9 b) Diff = 410.3 c) Diff = 364.7 d) Diff = 319.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 17.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 18%? Show the difference between the two effective interest rates.
a) Diff = -8.66E-05 b) Diff = -7.99E-05 c) Diff = -7.33E-05 d) Diff = -6.66E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 33% compounded weekly and checking account interest at 34.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 39.7309%, 41.3238% b) Effective interest rates = 39.3414%, 40.9187% c) Effective interest rates = 38.9519%, 40.5135% d) Effective interest rates = 38.5623%, 40.1084%
4. Problem 04
Tom has a bank deposit now worth $1346.25. A year ago, it was $1300. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.3005% b) The nominal monthly interest rate = 0.2976% c) The nominal monthly interest rate = 0.2947% d) The nominal monthly interest rate = 0.2917%
5. Problem 05
Mary has 7500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7640.63 b) 7640.62 c) 7602.42 d) 7564.21
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €660000 for it. If she waits for one year, she will likely get more, say, €717000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 6% per year, compounded monthly (II) 20% per year, compounded semiannually (III) 8% per year, compounded continuously
a) (I) 138.98 months, (II) 43.64 months, (III) 103.97 months b) (I) 277.61 months, (II) 50.98 months, (III) 59.41 months c) (I) 416.23 months, (II) 54.04 months, (III) 51.99 months d) (I) 832.12 months, (II) 57.51 months, (III) 46.21 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 15%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 15% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 13% in the first year, 15% in the second, and 19% in the third. Did you lose out by having locked into the 15% investment? If so, by how much?
a) I = 1975.94, Lost = 59.65 b) I = 1918.23, Lost = 59.6 c) I = 2035.44, Lost = 59.7 d) I = 2096.77, Lost = 59.75
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 4334.8 b) 3940.7 c) 3546.7 d) 3152.6
10. Problem 10
Clarence bought a flat for $260000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7400 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 43.1 months b) 39.5 months c) 35.9 months
d) 32.3 months 11. Problem 11
Clarence paid off an $355000 mortgage completely in 48 months. He paid $13000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 44.4841% b) 40.777% c) 37.07% d) 33.363%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $58000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 53137.42 b) 49049.93 c) 44962.43 d) 40874.94
13. Problem 13 A bond with a face value of S55000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 53137.42 b) 49049.93 c) 44962.43 d) 40874.94
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6500, and the deal you are offered is the following: You pay $7150 ($6500 plus $650 interest) in 11 equal $650 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $65 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4705%, APR = 53.6465%, "Effective Yearly Rate = 65.0514% b) Monthly Rate = 4.1267%, APR = 49.5199%, "Effective Yearly Rate = 60.0474% c) Monthly Rate = 3.7828%, APR = 45.3932%, "Effective Yearly Rate = 55.0435% d) Monthly Rate = 3.4389%, APR = 41.2666%, "Effective Yearly Rate = 50.0395%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 56
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 56 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5300 now and will need an upgrade at the end of two years, which you expect to be $4500. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 509.6 b) Diff = 463.3 c) Diff = 417 d) Diff = 370.6
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 18.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 19%? Show the difference between the two effective interest rates.
a) Diff = -6.73E-05 b) Diff = -6.11E-05 c) Diff = -5.5E-05 d) Diff = -4.89E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 33.5% compounded weekly and checking account interest at 35% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 40.4368%, 42.022% b) Effective interest rates = 40.0404%, 41.61% c) Effective interest rates = 39.6439%, 41.198% d) Effective interest rates = 39.2475%, 40.786%
4. Problem 04
Tom has a bank deposit now worth $1356.25. A year ago, it was $1310. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2896% b) The nominal monthly interest rate = 0.2867% c) The nominal monthly interest rate = 0.2838% d) The nominal monthly interest rate = 0.2809%
5. Problem 05
Mary has 7600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7740.63 b) 7740.63 c) 7740.62 d) 7701.92
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €670000 for it. If she waits for one year, she will likely get more, say, €728000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 7% per year, compounded monthly (II) 19% per year, compounded semiannually (III) 6% per year, compounded continuously
a) (I) 119.17 months, (II) 45.83 months, (III) 138.63 months b) (I) 208.29 months, (II) 48.26 months, (III) 69.31 months c) (I) 277.61 months, (II) 50.98 months, (III) 59.41 months d) (I) 416.23 months, (II) 54.04 months, (III) 51.99 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 16%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 16% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 14% in the first year, 16% in the second, and 20% in the third. Did you lose out by having locked into the 16% investment? If so, by how much?
a) I = 1918.23, Lost = 59.6 b) I = 1862.25, Lost = 59.55 c) I = 1975.94, Lost = 59.65 d) I = 2035.44, Lost = 59.7
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 6331.5 b) 5803.8 c) 5276.2 d) 4748.6
10. Problem 10
Clarence bought a flat for $270000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7500 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 40.6 months b) 36.9 months c) 33.2 months
d) 29.5 months 11. Problem 11
Clarence paid off an $360000 mortgage completely in 48 months. He paid $13200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.8783% b) 37.1621% c) 33.4459% d) 29.7297%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $59000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 55113.2 b) 50873.72 c) 46634.25 d) 42394.77
13. Problem 13 A bond with a face value of S56000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 55113.2 b) 50873.72 c) 46634.25 d) 42394.77
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6600, and the deal you are offered is the following: You pay $7260 ($6600 plus $660 interest) in 11 equal $660 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $66 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4684%, APR = 53.6206%, "Effective Yearly Rate = 65.0137% b) Monthly Rate = 4.1247%, APR = 49.4959%, "Effective Yearly Rate = 60.0127% c) Monthly Rate = 3.7809%, APR = 45.3712%, "Effective Yearly Rate = 55.0116% d) Monthly Rate = 3.4372%, APR = 41.2466%, "Effective Yearly Rate = 50.0106%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 57
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 57 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9700 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5350 now and will need an upgrade at the end of two years, which you expect to be $4550. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 611.9 b) Diff = 564.8 c) Diff = 517.8 d) Diff = 470.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 19.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 20%? Show the difference between the two effective interest rates.
a) Diff = -5.52E-05 b) Diff = -4.97E-05 c) Diff = -4.42E-05 d) Diff = -3.87E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 34% compounded weekly and checking account interest at 35.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 41.5495%, 43.1421% b) Effective interest rates = 41.1461%, 42.7232% c) Effective interest rates = 40.7428%, 42.3044% d) Effective interest rates = 40.3394%, 41.8855%
4. Problem 04
Tom has a bank deposit now worth $1366.25. A year ago, it was $1320. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2903% b) The nominal monthly interest rate = 0.2874% c) The nominal monthly interest rate = 0.2845% d) The nominal monthly interest rate = 0.2816%
5. Problem 05
Mary has 7700 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7840.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7840.62 b) 7801.42 c) 7762.22 d) 7723.01
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €680000 for it. If she waits for one year, she will likely get more, say, €739000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 8% per year, compounded monthly (II) 18% per year, compounded semiannually (III) 4% per year, compounded continuously
a) (I) 104.32 months, (II) 48.26 months, (III) 207.94 months b) (I) 166.7 months, (II) 45.83 months, (III) 83.18 months c) (I) 208.29 months, (II) 48.26 months, (III) 69.31 months d) (I) 277.61 months, (II) 50.98 months, (III) 59.41 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 3%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 3% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 1% in the first year, 3% in the second, and 7% in the third. Did you lose out by having locked into the 3% investment? If so, by how much?
a) I = 1862.25, Lost = 59.55 b) I = 2742.1, Lost = 60.2 c) I = 1918.23, Lost = 59.6 d) I = 1975.94, Lost = 59.65
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 6822.2 b) 6202 c) 5581.8 d) 4961.6
10. Problem 10
Clarence bought a flat for $280000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7600 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 45.5 months b) 41.7 months c) 37.9 months
d) 34.1 months 11. Problem 11
Clarence paid off an $365000 mortgage completely in 48 months. He paid $13400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 40.9766% b) 37.2514% c) 33.5263% d) 29.8011%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 17% compounded semiannually, and a bond maturing in 15 years with a face value of $60000 and a coupon rate of 12%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 57043.65 b) 52655.68 c) 48267.71 d) 43879.73
13. Problem 13 A bond with a face value of S57000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 12% compounded quarterly on your money?
a) 57043.65 b) 52655.68 c) 48267.71 d) 43879.73
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6700, and the deal you are offered is the following: You pay $7370 ($6700 plus $670 interest) in 11 equal $670 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $67 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4663%, APR = 53.5954%, "Effective Yearly Rate = 64.9772% b) Monthly Rate = 4.1227%, APR = 49.4726%, "Effective Yearly Rate = 59.979% c) Monthly Rate = 3.7792%, APR = 45.3499%, "Effective Yearly Rate = 54.9807% d) Monthly Rate = 3.4356%, APR = 41.2272%, "Effective Yearly Rate = 49.9825%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 58
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 58 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9800 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5400 now and will need an upgrade at the end of two years, which you expect to be $4600. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 621.5 b) Diff = 573.7 c) Diff = 525.9 d) Diff = 478.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 20.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 21%? Show the difference between the two effective interest rates.
a) Diff = -5.38E-05 b) Diff = -4.89E-05 c) Diff = -4.4E-05 d) Diff = -3.91E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 34.5% compounded weekly and checking account interest at 36% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 42.2693%, 43.8534% b) Effective interest rates = 41.859%, 43.4276% c) Effective interest rates = 41.4486%, 43.0018% d) Effective interest rates = 41.0382%, 42.5761%
4. Problem 04
Tom has a bank deposit now worth $1376.25. A year ago, it was $1330. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.291% b) The nominal monthly interest rate = 0.2881% c) The nominal monthly interest rate = 0.2853% d) The nominal monthly interest rate = 0.2824%
5. Problem 05
Mary has 7800 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 7940.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 7940.63 b) 7940.62 c) 7900.92 d) 7861.22
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €690000 for it. If she waits for one year, she will likely get more, say, €750000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 9% per year, compounded monthly (II) 17% per year, compounded semiannually (III) 5% per year, compounded continuously
a) (I) 92.77 months, (II) 50.98 months, (III) 166.36 months b) (I) 138.98 months, (II) 43.64 months, (III) 103.97 months c) (I) 166.7 months, (II) 45.83 months, (III) 83.18 months d) (I) 208.29 months, (II) 48.26 months, (III) 69.31 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 4%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 4% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 2% in the first year, 4% in the second, and 8% in the third. Did you lose out by having locked into the 4% investment? If so, by how much?
a) I = 2742.1, Lost = 60.2 b) I = 2661.29, Lost = 60.15 c) I = 1862.25, Lost = 59.55 d) I = 1918.23, Lost = 59.6
9. Problem 09
A car loan requires 25 monthly payments of $280, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 7400.7 b) 6727.9 c) 6055.1 d) 5382.3
10. Problem 10
Clarence bought a flat for $290000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7700 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 50.5 months b) 46.6 months c) 42.7 months
d) 38.8 months 11. Problem 11
Clarence paid off an $370000 mortgage completely in 48 months. He paid $13600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 41.0721% b) 37.3382% c) 33.6044% d) 29.8706%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 8% compounded semiannually, and a bond maturing in 15 years with a face value of $61000 and a coupon rate of 3%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 34629.65 b) 31166.68 c) 27703.72 d) 24240.75
13. Problem 13 A bond with a face value of S58000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 13% compounded quarterly on your money?
a) 34629.65 b) 31166.68 c) 27703.72 d) 24240.75
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6800, and the deal you are offered is the following: You pay $7480 ($6800 plus $680 interest) in 11 equal $680 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $68 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4642%, APR = 53.5709%, "Effective Yearly Rate = 64.9417% b) Monthly Rate = 4.1208%, APR = 49.4501%, "Effective Yearly Rate = 59.9462% c) Monthly Rate = 3.7774%, APR = 45.3292%, "Effective Yearly Rate = 54.9507% d) Monthly Rate = 3.434%, APR = 41.2084%, "Effective Yearly Rate = 49.9552%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 59
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 59 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $9900 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5450 now and will need an upgrade at the end of two years, which you expect to be $4650. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 582.5 b) Diff = 533.9 c) Diff = 485.4 d) Diff = 436.9
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 21.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 22%? Show the difference between the two effective interest rates.
a) Diff = -5.04E-05 b) Diff = -4.62E-05 c) Diff = -4.2E-05 d) Diff = -3.78E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 35% compounded weekly and checking account interest at 36.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 42.1579%, 43.7024% b) Effective interest rates = 41.7404%, 43.2697% c) Effective interest rates = 41.323%, 42.8371% d) Effective interest rates = 40.9056%, 42.4044%
4. Problem 04
Tom has a bank deposit now worth $1386.25. A year ago, it was $1340. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2832% b) The nominal monthly interest rate = 0.2803% c) The nominal monthly interest rate = 0.2775% d) The nominal monthly interest rate = 0.2747%
5. Problem 05
Mary has 7900 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8040.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8040.63 b) 8000.42 c) 7960.22 d) 7920.02
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €700000 for it. If she waits for one year, she will likely get more, say, €761000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 10% per year, compounded monthly (II) 16% per year, compounded semiannually (III) 6% per year, compounded continuously
a) (I) 83.52 months, (II) 54.04 months, (III) 138.63 months b) (I) 119.17 months, (II) 45.83 months, (III) 138.63 months c) (I) 138.98 months, (II) 43.64 months, (III) 103.97 months d) (I) 166.7 months, (II) 45.83 months, (III) 83.18 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 5%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 5% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 3% in the first year, 5% in the second, and 9% in the third. Did you lose out by having locked into the 5% investment? If so, by how much?
a) I = 2661.29, Lost = 60.15 b) I = 2582.93, Lost = 60.1 c) I = 2742.1, Lost = 60.2 d) I = 1862.25, Lost = 59.55
9. Problem 09
A car loan requires 30 monthly payments of $240, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 8922.8 b) 8236.4 c) 7550 d) 6863.7
10. Problem 10
Clarence bought a flat for $300000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7800 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 39.8 months b) 35.8 months c) 31.8 months
d) 27.8 months 11. Problem 11
Clarence paid off an $375000 mortgage completely in 48 months. He paid $13800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 37.4226% b) 33.6803% c) 29.9381% d) 26.1958%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 9% compounded semiannually, and a bond maturing in 15 years with a face value of $62000 and a coupon rate of 4%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 36752.22 b) 33077 c) 29401.78 d) 25726.56
13. Problem 13 A bond with a face value of S59000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 14% compounded quarterly on your money?
a) 36752.22 b) 33077 c) 29401.78 d) 25726.56
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $6900, and the deal you are offered is the following: You pay $7590 ($6900 plus $690 interest) in 11 equal $690 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $69 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4623%, APR = 53.5472%, "Effective Yearly Rate = 64.9073% b) Monthly Rate = 4.119%, APR = 49.4282%, "Effective Yearly Rate = 59.9145% c) Monthly Rate = 3.7758%, APR = 45.3091%, "Effective Yearly Rate = 54.9216% d) Monthly Rate = 3.4325%, APR = 41.1901%, "Effective Yearly Rate = 49.9287%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 60
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 60 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10000 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5500 now and will need an upgrade at the end of two years, which you expect to be $4700. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 591.4 b) Diff = 542.1 c) Diff = 492.8 d) Diff = 443.5
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 22.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 23%? Show the difference between the two effective interest rates.
a) Diff = -4.16E-05 b) Diff = -3.82E-05 c) Diff = -3.47E-05 d) Diff = -3.12E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 35.5% compounded weekly and checking account interest at 37% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 42.4461%, 43.9665% b) Effective interest rates = 42.0217%, 43.5268% c) Effective interest rates = 41.5972%, 43.0872% d) Effective interest rates = 41.1727%, 42.6475%
4. Problem 04
Tom has a bank deposit now worth $1396.25. A year ago, it was $1350. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2867% b) The nominal monthly interest rate = 0.2839% c) The nominal monthly interest rate = 0.2811% d) The nominal monthly interest rate = 0.2783%
5. Problem 05
Mary has 8000 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8140.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8140.63 b) 8140.63 c) 8099.92 d) 8059.22
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €710000 for it. If she waits for one year, she will likely get more, say, €772000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 11% per year, compounded monthly (II) 15% per year, compounded semiannually (III) 7% per year, compounded continuously
a) (I) 75.96 months, (II) 57.51 months, (III) 118.83 months b) (I) 104.32 months, (II) 48.26 months, (III) 207.94 months c) (I) 119.17 months, (II) 45.83 months, (III) 138.63 months d) (I) 138.98 months, (II) 43.64 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 6%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 6% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 4% in the first year, 6% in the second, and 10% in the third. Did you lose out by having locked into the 6% investment? If so, by how much?
a) I = 2582.93, Lost = 60.1 b) I = 2506.93, Lost = 60.05 c) I = 2661.29, Lost = 60.15 d) I = 2742.1, Lost = 60.2
9. Problem 09
A car loan requires 35 monthly payments of $200, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 7280.6 b) 6618.7 c) 5956.9 d) 5295
10. Problem 10
Clarence bought a flat for $310000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $7900 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 48.8 months b) 44.7 months c) 40.7 months
d) 36.6 months 11. Problem 11
Clarence paid off an $380000 mortgage completely in 48 months. He paid $14000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 37.5046% b) 33.7541% c) 30.0037% d) 26.2532%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 10% compounded semiannually, and a bond maturing in 15 years with a face value of $63000 and a coupon rate of 5%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 50424.91 b) 46546.07 c) 42667.23 d) 38788.39
13. Problem 13 A bond with a face value of S60000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 15% compounded quarterly on your money?
a) 50424.91 b) 46546.07 c) 42667.23 d) 38788.39
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7000, and the deal you are offered is the following: You pay $7700 ($7000 plus $700 interest) in 11 equal $700 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $70 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4603%, APR = 53.5241%, "Effective Yearly Rate = 64.8739% b) Monthly Rate = 4.1172%, APR = 49.4069%, "Effective Yearly Rate = 59.8836% c) Monthly Rate = 3.7741%, APR = 45.2896%, "Effective Yearly Rate = 54.8933% d) Monthly Rate = 3.431%, APR = 41.1724%, "Effective Yearly Rate = 49.903%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 61
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 61 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10100 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5550 now and will need an upgrade at the end of two years, which you expect to be $4750. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 500.2 b) Diff = 450.2 c) Diff = 400.2 d) Diff = 350.1
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 23.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 24%? Show the difference between the two effective interest rates.
a) Diff = -3.49E-05 b) Diff = -3.22E-05 c) Diff = -2.95E-05 d) Diff = -2.69E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 36% compounded weekly and checking account interest at 37.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 44.0184%, 45.5597% b) Effective interest rates = 43.5868%, 45.113% c) Effective interest rates = 43.1553%, 44.6664% d) Effective interest rates = 42.7237%, 44.2197%
4. Problem 04
Tom has a bank deposit now worth $1406.25. A year ago, it was $1360. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2847% b) The nominal monthly interest rate = 0.2819% c) The nominal monthly interest rate = 0.2791% d) The nominal monthly interest rate = 0.2763%
5. Problem 05
Mary has 8100 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8240.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8240.63 b) 8240.63 c) 8240.63 d) 8240.63
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €720000 for it. If she waits for one year, she will likely get more, say, €783000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 12% per year, compounded monthly (II) 14% per year, compounded semiannually (III) 8% per year, compounded continuously
a) (I) 69.66 months, (II) 61.47 months, (III) 103.97 months b) (I) 92.77 months, (II) 50.98 months, (III) 166.36 months c) (I) 104.32 months, (II) 48.26 months, (III) 207.94 months d) (I) 119.17 months, (II) 45.83 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 7%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 7% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 5% in the first year, 7% in the second, and 11% in the third. Did you lose out by having locked into the 7% investment? If so, by how much?
a) I = 2506.93, Lost = 60.05 b) I = 2433.24, Lost = 60 c) I = 2582.93, Lost = 60.1 d) I = 2661.29, Lost = 60.15
9. Problem 09
A car loan requires 40 monthly payments of $160, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 6002.3 b) 5402.1 c) 4801.8 d) 4201.6
10. Problem 10
Clarence bought a flat for $320000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8000 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 54 months b) 49.9 months c) 45.7 months
d) 41.6 months 11. Problem 11
Clarence paid off an $385000 mortgage completely in 48 months. He paid $14200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 37.5844% b) 33.8259% c) 30.0675% d) 26.3091%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 11% compounded semiannually, and a bond maturing in 15 years with a face value of $64000 and a coupon rate of 6%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 48895.21 b) 44820.61 c) 40746.01 d) 36671.41
13. Problem 13 A bond with a face value of S61000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 6% compounded quarterly on your money?
a) 48895.21 b) 44820.61 c) 40746.01 d) 36671.41
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7100, and the deal you are offered is the following: You pay $7810 ($7100 plus $710 interest) in 11 equal $710 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $71 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4585%, APR = 53.5017%, "Effective Yearly Rate = 64.8414% b) Monthly Rate = 4.1155%, APR = 49.3862%, "Effective Yearly Rate = 59.8536% c) Monthly Rate = 3.7726%, APR = 45.2706%, "Effective Yearly Rate = 54.8658% d) Monthly Rate = 3.4296%, APR = 41.1551%, "Effective Yearly Rate = 49.878%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 62
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 62 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10200 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5600 now and will need an upgrade at the end of two years, which you expect to be $4800. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 507.5 b) Diff = 456.8 c) Diff = 406 d) Diff = 355.3
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 24.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 25%? Show the difference between the two effective interest rates.
a) Diff = -1.85E-05 b) Diff = -1.67E-05 c) Diff = -1.48E-05 d) Diff = -1.3E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 36.5% compounded weekly and checking account interest at 38% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 44.3065%, 45.823% b) Effective interest rates = 43.8678%, 45.3693% c) Effective interest rates = 43.4292%, 44.9156% d) Effective interest rates = 42.9905%, 44.4619%
4. Problem 04
Tom has a bank deposit now worth $1416.25. A year ago, it was $1370. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2826% b) The nominal monthly interest rate = 0.2798% c) The nominal monthly interest rate = 0.2771% d) The nominal monthly interest rate = 0.2743%
5. Problem 05
Mary has 8200 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8340.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8340.63 b) 8340.63 c) 8340.63 d) 8340.63
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €730000 for it. If she waits for one year, she will likely get more, say, €794000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 13% per year, compounded monthly (II) 13% per year, compounded semiannually (III) 9% per year, compounded continuously
a) (I) 64.33 months, (II) 66.04 months, (III) 92.42 months b) (I) 83.52 months, (II) 54.04 months, (III) 138.63 months c) (I) 92.77 months, (II) 50.98 months, (III) 166.36 months d) (I) 104.32 months, (II) 48.26 months, (III) 207.94 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 8%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 8% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 6% in the first year, 8% in the second, and 12% in the third. Did you lose out by having locked into the 8% investment? If so, by how much?
a) I = 2433.24, Lost = 60 b) I = 2361.76, Lost = 59.95 c) I = 2506.93, Lost = 60.05 d) I = 2582.93, Lost = 60.1
9. Problem 09
A car loan requires 45 monthly payments of $120, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 5525.8 b) 5023.5 c) 4521.1 d) 4018.8
10. Problem 10
Clarence bought a flat for $330000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8100 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 42.4 months b) 38.2 months c) 33.9 months
d) 29.7 months 11. Problem 11
Clarence paid off an $390000 mortgage completely in 48 months. He paid $14400per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 45.1944% b) 41.4282% c) 37.662% d) 33.8958%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 12% compounded semiannually, and a bond maturing in 15 years with a face value of $65000 and a coupon rate of 7%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 42632.15 b) 38368.93 c) 34105.72 d) 29842.5
13. Problem 13 A bond with a face value of S62000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 7% compounded quarterly on your money?
a) 42632.15 b) 38368.93 c) 34105.72 d) 29842.5
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7200, and the deal you are offered is the following: You pay $7920 ($7200 plus $720 interest) in 11 equal $720 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $72 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4567%, APR = 53.4799%, "Effective Yearly Rate = 64.8098% b) Monthly Rate = 4.1138%, APR = 49.366%, "Effective Yearly Rate = 59.8244% c) Monthly Rate = 3.771%, APR = 45.2522%, "Effective Yearly Rate = 54.8391% d) Monthly Rate = 3.4282%, APR = 41.1384%, "Effective Yearly Rate = 49.8537%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 63
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 63 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10300 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5650 now and will need an upgrade at the end of two years, which you expect to be $4850. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 617.9 b) Diff = 566.4 c) Diff = 514.9 d) Diff = 463.4
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 25.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 26%? Show the difference between the two effective interest rates.
a) Diff = -0.96E-05 b) Diff = -0.87E-05 c) Diff = -0.77E-05 d) Diff = -0.68E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 37% compounded weekly and checking account interest at 38.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 45.0298%, 46.5362% b) Effective interest rates = 44.5839%, 46.0754% c) Effective interest rates = 44.1381%, 45.6147% d) Effective interest rates = 43.6922%, 45.1539%
4. Problem 04
Tom has a bank deposit now worth $1426.25. A year ago, it was $1380. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2833% b) The nominal monthly interest rate = 0.2806% c) The nominal monthly interest rate = 0.2778% d) The nominal monthly interest rate = 0.2751%
5. Problem 05
Mary has 8300 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8440.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8440.63 b) 8440.63 c) 8398.43 d) 8356.22
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €740000 for it. If she waits for one year, she will likely get more, say, €805000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 14% per year, compounded monthly (II) 12% per year, compounded semiannually (III) 10% per year, compounded continuously
a) (I) 59.76 months, (II) 71.37 months, (III) 83.18 months b) (I) 75.96 months, (II) 57.51 months, (III) 118.83 months c) (I) 83.52 months, (II) 54.04 months, (III) 138.63 months d) (I) 92.77 months, (II) 50.98 months, (III) 166.36 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 9%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 9% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 7% in the first year, 9% in the second, and 13% in the third. Did you lose out by having locked into the 9% investment? If so, by how much?
a) I = 2361.76, Lost = 59.95 b) I = 2292.45, Lost = 59.9 c) I = 2433.24, Lost = 60 d) I = 2506.93, Lost = 60.05
9. Problem 09
A car loan requires 50 monthly payments of $80, starting today. At an annual rate of 4% compounded monthly, how much money is being lent?
a) 4429.3 b) 4060.2 c) 3691.1 d) 3322
10. Problem 10
Clarence bought a flat for $340000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8200 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 56.3 months b) 51.9 months c) 47.6 months
d) 43.3 months 11. Problem 11
Clarence paid off an $395000 mortgage completely in 48 months. He paid $14600per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 49.0588% b) 45.285% c) 41.5113% d) 37.7375%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 13% compounded semiannually, and a bond maturing in 15 years with a face value of $66000 and a coupon rate of 8%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 48898.5 b) 44453.18 c) 40007.87 d) 35562.55
13. Problem 13 A bond with a face value of S63000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 8% compounded quarterly on your money?
a) 48898.5 b) 44453.18 c) 40007.87 d) 35562.55
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7300, and the deal you are offered is the following: You pay $8030 ($7300 plus $730 interest) in 11 equal $730 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $73 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4549%, APR = 53.4587%, "Effective Yearly Rate = 64.7791% b) Monthly Rate = 4.1122%, APR = 49.3465%, "Effective Yearly Rate = 59.7961% c) Monthly Rate = 3.7695%, APR = 45.2343%, "Effective Yearly Rate = 54.8131% d) Monthly Rate = 3.4268%, APR = 41.122%, "Effective Yearly Rate = 49.8301%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 64
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 64 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10400 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5700 now and will need an upgrade at the end of two years, which you expect to be $4900. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 522.3 b) Diff = 470.1 c) Diff = 417.8 d) Diff = 365.6
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 26.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 27%? Show the difference between the two effective interest rates.
a) Diff = -0.02E-05 b) Diff = -0.02E-05 c) Diff = -0.02E-05 d) Diff = -0.02E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 37.5% compounded weekly and checking account interest at 39% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 46.6626%, 48.1882% b) Effective interest rates = 46.2095%, 47.7204% c) Effective interest rates = 45.7565%, 47.2525% d) Effective interest rates = 45.3035%, 46.7847%
4. Problem 04
Tom has a bank deposit now worth $1436.25. A year ago, it was $1390. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2731% b) The nominal monthly interest rate = 0.2704% c) The nominal monthly interest rate = 0.2677% d) The nominal monthly interest rate = 0.2649%
5. Problem 05
Mary has 8400 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8540.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8540.63 b) 8540.63 c) 8540.63 d) 8497.93
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €750000 for it. If she waits for one year, she will likely get more, say, €816000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 15% per year, compounded monthly (II) 11% per year, compounded semiannually (III) 11% per year, compounded continuously
a) (I) 55.8 months, (II) 77.68 months, (III) 75.62 months b) (I) 69.66 months, (II) 61.47 months, (III) 103.97 months c) (I) 75.96 months, (II) 57.51 months, (III) 118.83 months d) (I) 83.52 months, (II) 54.04 months, (III) 138.63 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 10%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 10% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 8% in the first year, 10% in the second, and 14% in the third. Did you lose out by having locked into the 10% investment? If so, by how much?
a) I = 2292.45, Lost = 59.9 b) I = 2225.22, Lost = 59.85 c) I = 2361.76, Lost = 59.95 d) I = 2433.24, Lost = 60
9. Problem 09
A car loan requires 10 monthly payments of $400, starting today. At an annual rate of 2% compounded monthly, how much money is being lent?
a) 4764.2 b) 4367.2 c) 3970.2 d) 3573.2
10. Problem 10
Clarence bought a flat for $350000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8300 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 48.5 months b) 44.1 months c) 39.7 months
d) 35.3 months 11. Problem 11
Clarence paid off an $400000 mortgage completely in 48 months. He paid $14800per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 49.1544% b) 45.3733% c) 41.5922% d) 37.8111%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 14% compounded semiannually, and a bond maturing in 15 years with a face value of $67000 and a coupon rate of 9%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 60079.31 b) 55457.83 c) 50836.34 d) 46214.86
13. Problem 13 A bond with a face value of S64000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 9% compounded quarterly on your money?
a) 60079.31 b) 55457.83 c) 50836.34 d) 46214.86
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7400, and the deal you are offered is the following: You pay $8140 ($7400 plus $740 interest) in 11 equal $740 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $74 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4532%, APR = 53.438%, "Effective Yearly Rate = 64.7492% b) Monthly Rate = 4.1106%, APR = 49.3274%, "Effective Yearly Rate = 59.7685% c) Monthly Rate = 3.7681%, APR = 45.2168%, "Effective Yearly Rate = 54.7878% d) Monthly Rate = 3.4255%, APR = 41.1062%, "Effective Yearly Rate = 49.8071%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 65
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 65 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10500 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5750 now and will need an upgrade at the end of two years, which you expect to be $4950. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 582.6 b) Diff = 529.6 c) Diff = 476.6 d) Diff = 423.7
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 27.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 28%? Show the difference between the two effective interest rates.
a) Diff = 1.07E-05 b) Diff = 0.97E-05 c) Diff = 0.87E-05 d) Diff = 0.78E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 38% compounded weekly and checking account interest at 39.5% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 47.4073%, 48.922% b) Effective interest rates = 46.9471%, 48.447% c) Effective interest rates = 46.4868%, 47.9721% d) Effective interest rates = 46.0265%, 47.4971%
4. Problem 04
Tom has a bank deposit now worth $1446.25. A year ago, it was $1400. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2766% b) The nominal monthly interest rate = 0.2739% c) The nominal monthly interest rate = 0.2712% d) The nominal monthly interest rate = 0.2685%
5. Problem 05
Mary has 8500 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8640.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8640.63 b) 8640.63 c) 8640.63 d) 8640.63
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €760000 for it. If she waits for one year, she will likely get more, say, €827000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 16% per year, compounded monthly (II) 10% per year, compounded semiannually (III) 12% per year, compounded continuously
a) (I) 52.33 months, (II) 85.24 months, (III) 69.31 months b) (I) 64.33 months, (II) 66.04 months, (III) 92.42 months c) (I) 69.66 months, (II) 61.47 months, (III) 103.97 months d) (I) 75.96 months, (II) 57.51 months, (III) 118.83 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 11%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 11% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 9% in the first year, 11% in the second, and 15% in the third. Did you lose out by having locked into the 11% investment? If so, by how much?
a) I = 2225.22, Lost = 59.85 b) I = 2160.02, Lost = 59.8 c) I = 2292.45, Lost = 59.9 d) I = 2361.76, Lost = 59.95
9. Problem 09
A car loan requires 15 monthly payments of $360, starting today. At an annual rate of 2% compounded monthly, how much money is being lent?
a) 6938.8 b) 6405.1 c) 5871.3 d) 5337.6
10. Problem 10
Clarence bought a flat for $360000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8400 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 49.4 months b) 44.9 months c) 40.4 months
d) 35.9 months 11. Problem 11
Clarence paid off an $405000 mortgage completely in 48 months. He paid $15000per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 41.671% b) 37.8827% c) 34.0944% d) 30.3062%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 15% compounded semiannually, and a bond maturing in 15 years with a face value of $68000 and a coupon rate of 10%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 62299.05 b) 57506.81 c) 52714.58 d) 47922.34
13. Problem 13 A bond with a face value of S65000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 10% compounded quarterly on your money?
a) 62299.05 b) 57506.81 c) 52714.58 d) 47922.34
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7500, and the deal you are offered is the following: You pay $8250 ($7500 plus $750 interest) in 11 equal $750 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $75 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4515%, APR = 53.4179%, "Effective Yearly Rate = 64.7201% b) Monthly Rate = 4.1091%, APR = 49.3089%, "Effective Yearly Rate = 59.7416% c) Monthly Rate = 3.7666%, APR = 45.1998%, "Effective Yearly Rate = 54.7631% d) Monthly Rate = 3.4242%, APR = 41.0907%, "Effective Yearly Rate = 49.7847%
Engineering Economics – TIN453DV01– Học Kỳ 11.1A Bonus Problem 01 – ĐỀ SỐ 66
Đề số: SV chọn đề số trùng với số thứ tự trong bảng điểm được đăng trên elearning. SV làm sai đề sẽ không được chấm điểm. Thời gian: nạn chót nộp bài Homework 03 là 11:50pm ngày chủ nhật 11/12/2011 Hình thức: elearning dropbox. Mọi hình thức khác sẽ KHÔNG được chấp nhận. Lưu ý: đây là bài làm cá nhân, mọi hình thức sao chép bài làm của nhau sẽ bị không điểm.
o Đối với mổi câu hỏi SV đánh dấu đáp án đúng (Tô đen để chọn câu) vào bảng trả lời trắc nghiệm và nộp kèm bài giải.
o Câu trả lời không có bài giải đi kèm cũng sẽ không được tính điểm.
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ĐỀ SỐ 66 1. Problem 01
You are looking at purchasing a new computer for your four-year undergraduate program. Brand 1 costs $10600 now, and you expect it will last throughout your program without any upgrades. Brand 2 costs $5800 now and will need an upgrade at the end of two years, which you expect to be $5000. With 8% annual interest, compounded monthly, which is the less expensive alternative (calculate the difference between the two options), if they provide the same level of performance and will both be worthless at the end of the four years?
a) Diff = 590.7 b) Diff = 537 c) Diff = 483.3 d) Diff = 429.6
2. Problem 02
The Bank of Brisbane is offering a new savings account that pays a nominal 28.99% interest, compounded continuously. Will your money earn more in this account than in a daily interest account that pays 29%? Show the difference between the two effective interest rates.
a) Diff = 2.43E-05 b) Diff = 2.23E-05 c) Diff = 2.02E-05 d) Diff = 1.82E-05
3. Problem 03
The Crete Credit Union advertises savings account interest as 38.5% compounded weekly and checking account interest at 40% compounded monthly. What are the effective interest rates for the two types of accounts?
a) Effective interest rates = 47.6882%, 49.1769% b) Effective interest rates = 47.2207%, 48.6948% c) Effective interest rates = 46.7532%, 48.2126% d) Effective interest rates = 46.2856%, 47.7305%
4. Problem 04
Tom has a bank deposit now worth $1456.25. A year ago, it was $1410. What was the nominal monthly interest rate on his account?
a) The nominal monthly interest rate = 0.2693% b) The nominal monthly interest rate = 0.2666% c) The nominal monthly interest rate = 0.2639% d) The nominal monthly interest rate = 0.2612%
5. Problem 05
Mary has 8600 dollars in her bank account right now. She wanted to know how much it would be in one year, so she calculated and came up with 8740.73 dollars. Then she realized she had made a mistake. She had wanted to use the formula for monthly compounding, but instead, she had used the continuous compounding formula. Redo the calculation for Mary and find out how much will actually be in her account a year from now.
a) 8740.63 b) 8740.63 c) 8696.93 d) 8653.23
6. Problem 06
Julie has a small house on a small street in a small town. If she sells the house now, she will likely get €770000 for it. If she waits for one year, she will likely get more, say, €838000. If she sells the house now, she can invest the money in a one-year guaranteed growth bond that pays 8% interest, compounded monthly. If she keeps the house, then the interest on the mortgage payments is 8% compounded daily. Julie is indifferent between the two options: selling the house now and keeping the house for another year. Please advise her on what to do.
a) She should sell the house now. b) She should keep the house for another year. c) It makes no difference between two options d) The problem cannot be solved as there isn’t enough information.
7. Problem 07
Determine how long it will take for a $100 deposit to double in value for each of the following interest rates and compounding periods.
(I) 17% per year, compounded monthly (II) 9% per year, compounded semiannually (III) 13% per year, compounded continuously
a) (I) 49.27 months, (II) 94.48 months, (III) 63.98 months b) (I) 59.76 months, (II) 71.37 months, (III) 83.18 months c) (I) 64.33 months, (II) 66.04 months, (III) 92.42 months d) (I) 69.66 months, (II) 61.47 months, (III) 103.97 months.
8. Problem 08
Today, an investment you made three years ago has matured and is now worth 3000 dollars. It was a three-year deposit that bore an interest rate of 12%per year, compounded monthly. You knew at the time that you were taking a risk in making such an investment because interest rates vary over time and you "locked in" at 12% for three years.
(I) How much was your initial deposit? (II) Looking back over the past three years, interest rates for similar one-year investments did indeed varied. The interest rates were 10% in the first year, 12% in the second, and 16% in the third. Did you lose out by having locked into the 12% investment? If so, by how much?
a) I = 2160.02, Lost = 59.8 b) I = 2096.77, Lost = 59.75 c) I = 2225.22, Lost = 59.85 d) I = 2292.45, Lost = 59.9
9. Problem 09
A car loan requires 20 monthly payments of $320, starting today. At an annual rate of 2% compounded monthly, how much money is being lent?
a) 8189.8 b) 7559.8 c) 6929.8 d) 6299.8
10. Problem 10
Clarence bought a flat for $370000 in 2002. He made a $10000 down payment and negotiated a mortgage from the previous owner for the balance. Clarence agreed to pay the previous owner $8500 per month at 4% nominal interest, compounded monthly. How long did it take him to pay back the mortgage?
a) 50.3 months b) 45.7 months c) 41.2 months
d) 36.6 months 11. Problem 11
Clarence paid off an $410000 mortgage completely in 48 months. He paid $15200per month, and at the end of the first year made an extra payment of $7000. What interest rate was he charged on the mortgage?
Hint: using linear interpolation method to calculate the monthly rate hen to calculate the APR and effective yearly rate. To do this you assume two interest rate values then find the corresponding present worth values of all payments, and so on ….
a) 41.7478% b) 37.9525% c) 34.1573% d) 30.362%
12. Problem 12 Bonds are investments that provide an annuity and a future value in return for a cost today. They have a face value, which is the amount for which they can be redeemed after a certain period of time. They also have a coupon rate, meaning that they pay the bearer (or holder) an annuity, usually semiannually, calculated as a percentage of the face value. For example, a coupon rate of 10% on a bond with an S8000 face value would pay an annuity of S400 each six months. Bonds can sell at more or less than the face value, depending on how buyers perceive them as investments.
If money can earn 16% compounded semiannually, and a bond maturing in 15 years with a face value of $69000 and a coupon rate of 11%. What is the bond’s worth today?
Hint: to calculate the worth of a bond today, sum together the present worth of the face value (a future amount) and the coupons (an annuity) at an appropriate interest rate.
a) 54538.36 b) 49580.32 c) 44622.29 d) 39664.26
13. Problem 13 A bond with a face value of S66000 pays quarterly interest of 1.5% each period. Twenty-six interest payments remain before the bond matures. How much would you be willing to pay for this bond today if the next interest payment is due now and you want to earn 11% compounded quarterly on your money?
a) 54538.36 b) 49580.32 c) 44622.29 d) 39664.26
14. Problem 14 The Easy Loan Company advertises a "10%" loan. You need to borrow $7600, and the deal you are offered is the following: You pay $8360 ($7600 plus $760 interest) in 11 equal $760 amounts, starting one month from today. In addition, there is a $25 administration fee for the loan, payable immediately, and a processing fee of $76 per payment. Furthermore, there is a $20 non-optional closing fee to be included in the last payment. Recognizing fees as a form of interest payment, what is the actual effective interest rate? Hint: using linear interpolation method to calculate the monthly rate, then to calculate the APR and effective yearly rate?
a) Monthly Rate = 4.4499%, APR = 53.3984%, "Effective Yearly Rate = 64.6918% b) Monthly Rate = 4.1076%, APR = 49.2908%, "Effective Yearly Rate = 59.7155% c) Monthly Rate = 3.7653%, APR = 45.1832%, "Effective Yearly Rate = 54.7392% d) Monthly Rate = 3.423%, APR = 41.0757%, "Effective Yearly Rate = 49.7629%
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