Engineering Economy

ENGR 3970/ET 5970 Homework Assignment #1 – Spring 2019

Note: Show all of your work to arrive at a final result and for full credit. Remember to put your name on

all pages if submitting multiple pages.

1) If a person places $9,000 in an account that pays 12% compounded annually, how much money will

be in the account after 12 years?

2) Four years ago a person borrowed $15,000 at an interest rate of 10% compounded annually and

agreed to pay it back in equal payments over a 10 year period. This same person now wants to pay off

the remaining amount of the loan. How much should this person pay? Assume that she has just made

the 3rd payment.

3) A person deposits $10,000 into an account that pays 8% compounded yearly. How much money will

be in the account after 9 years?

4) What is the accumulated amount resulting from a series of equal yearly deposits of $1,000 for 6 years

if the interest rate is 9% per year compounded yearly? Assume that the first deposit is made 1 year from

now.

5) What is the present value of a 15 year series of decreasing amounts if the interest rate is 6%

compounded annually, the first year amount is $50,000 and the rate of decrease is $2,000 per year?