You are purchasing a car. Consider the following information: Retail Cost: $30,000 20% Down Payment. Finance the rest with equal monthly payments. 5-year loan at 6% Resale value of the car at the end of 5 years is 25% of the original value Personal MARR is 8% Inflation rate is 3% Calculate the Present Worth of Cost of owning this car (express the cost as

You are purchasing a car. Consider the following information: Retail Cost: $30,000 20% Down Payment. Finance the rest with equal monthly payments. 5-year loan at 6% Resale value of the car at the end of 5 years is 25% of the original value Personal MARR is 8% Inflation rate is 3% Calculate the Present Worth of Cost of owning this car (express the cost as

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Tom Ward put $10,000 in a 5-year certificate of deposit that pays 3.5% interest per year. At maturity he will receive his $10,000 back. Tom’s marginal income tax rate is 24%. If the inflation rate is 2% per year, find his (a) before-tax rate of return, ignoring inflation(b) after-tax rate of return, ignoring inflation(c) after-tax rate of return, after taking inflation into account
"You invest $75 immediately for 9 years. The inflation rate is 5.1%. At the end of 9 years, you receive $230.78 in actual (year-9) dollars. What is the inflation-free internal rate of return? Enter your answer as a percentage rounded to the nearest tenth of a percent."
You would like to buy a house that is currently on the market at $85,000, but you cannot afford it right now. However, you think that you would be able to buy it after 4 years. If the expected inflation rate as applied to the pricepri this house is 6% per year, what is its expected price after four years?
A father wants to save in advance for his 8-year old daughter’s college expenses.The daughter will enter the college 10 years from now. An annual amount of$20,000 in today’s dollars (constant dollars) will be required to support the college for 4 years. Assume that these college payments will be made at the beginning of each school year. (The first payment occurs at the end of 10 years). Thefuture general inflation rate is estimated to be 5% per year, and the interest rateon the savings account will be 8% compounded quarterly (market interest rate)during this period. If the father has decided to save only $1,000 (actual dollars) atthe end of each quarter until she goes to college (the last deposit occurs at the endof 10 years) how much will the daughter have to borrow to cover her sophomoreexpenses?(a) $4,120 (b) $4,314(c) $4,000 (d) $4,090
An engineering project has an investment amount of $127083 with an annual net profit of $52659 for 5 years. If the interest rate and average inflation rate are 15% and 6%, respectively, calculate the present worth of the entire period.
A man wishes to set aside money for his retirement at the age 65 in a fund which will have an amount equivalent to P60k with today’s purchasing power. The estimated inflation rate is 7.5%. If the fund will earn 8% compounded annually what amount should he invest now on his 40th birthday?
0.0951 1 = (1+0) диаг ) If the effective annual interest rate is 9% per year and inflation is 3.8% per year what is the true annual interest rate?
Your department is budgeting miscellaneous expenses for the next 5 years. Your best guess at the annual inflation rate is 3.9% and the combined MARR is 15%. Expenses currently run $14,500 per year. Assume that expenses are end-of-year payments. Solve, a. Determine the then-current dollar amounts for years 1, 2, 3, 4, and 5. b. Determine the constant-dollar amount for years 1, 2, 3, 4, and 5. c. Determine the PW of the then-current-dollar amounts. d. Determine the PW of the constant dollar amounts.
A bicycle tire company performed a web-based study of a popular tire retail price over time. Thestudy indicated that price is set at $16.00 per tire, it was expected to increase to $19.00 over thenext 5 years.a. Determine the annual rate of inflation over 5 years to increase the price from$16.00 to $19.00. b. Determine the market interest rate that must be used in economic equivalencecomputations if inflation is considered and real 8% per year interest rate isexpected.
Somebody has bought US Dollar with half of his money and Euro with other half. Dollar has gained value over national currency by 1.6% each month and Euro 2.1% each month. The average monthly inflation rate is 1.3. Find the percentage earn of him/her at the end of 10 months.
Assuming an average inflation rate of 6% during the past 10 years, how much would a car costing P400k noc cost 10 years ago
a certain commodity has a present value of 15000, find the future amount of the commodity after 3 years if the economic experiencing an inflation rate of 10% annually