SDSU Engineering Economics Questions

User Generated

Mvob90

Engineering

San Diego State University

Question Description

I’m studying for my Engineering class and don’t understand how to answer this. Can you help me study?

please find the solution for the questions with steps

1) how many months will it take to pay off $705 debt, with monthly payment $25 at the end of each month, if the interest rate is %15, compounded monthly

2)Determine the breakeven resale price 15 years from now of an apartment house that can be bought today for $250000. its annual net income is $22000. the owner wants a %10 annual return on her investment

3)Tameshia deposits $5500 in her retirement account every year. if her account pays an average of %6 interest and she makes 38 deposits before she retires, how much money can she withdraw in 20 equal payments beginning 1 year after her last deposit

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Explanation & Answer

Attached.

Engineering Economics
Question 1
Given
Present value= 705 USD
Monthly payment = 25 USD
15 %
12

Interest rate = 15 % =

= 1.25 % 𝑚𝑜𝑛𝑡𝑙𝑦 = 0.0125

1−(1+𝑖)−𝑛
)
𝑖

Present value = PMT (
705 = 25

1−(1+0.0125)−𝑛
)
0.0125

705 1−(1+0.0125)−𝑛
=
)
25
0.0125

0.35 = 1 − (1 + 0.0125)−𝑛
-1+0.35 =...

Wbfrssnu (95)
Purdue University

Anonymous
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