Qize3 chapter4
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This document contains material from an engineering economy quiz for a class at Jordan University of Science and Technology. The quiz contains questions about cash flow diagrams and equivalency with different interest rates. It also contains practice problems calculating effective interest rates given nominal rates compounded at various intervals like semiannually and monthly.
Qize3 chapter4
- 1. Jordan University of Science and Technology Faculty of Engineering Industrial Engineering Department IE 341: Engineering Economy Quiz 3 Eng. Maysaa Faroon #First Semester 2011/2012 Name: ST Quiz: In the following cash flows diagram, Determine the value of W that makes the two cash ?flows diagrams equivalent if the interest rate i = 5% per year :Solution P01=p02 (P01=1,000(P/F,5%1)+1,000(P/F,5%,3) 1,000(P/F,5%,5 (P02=W+W(P/F,5%7 Then P01=P02 Class work : Q1: 12% nominal rate compounded semiannually then the effective per semiannual equals to? 12%/2= 6%... Q2: 12% nominal rate compounded semiannually then the effective per year equals to? i=(1+0.12/2) 2 -1 = 12.36% Q3 : 12% nominal rate compounded semiannually then the effective per month equals to? Step1: 12%/2= 6%per semiannual . Step2:nominal interest rate per semi compounded monthly 0.06=(1+r/6) 6 -1 = 5.855% per semi compounded monthly >> Step3: 5.855% /6 = 0.9758% effective per month