Eastern Kentucky University Engineering Economics Essay


QUESTION 1 Due within 27 hoursYou want to purchase a new company car for employees to visit clients. If you purhcase the car for $60,000 with a loan that has an APR of 12% in which interest accrues monthly, what would you expect the monthly payments to be if the term of the loan is 5 years?QUESTION 2You purchase a new car for $45,000. You own that car for 15 years when you sell it for $25,000. If the cost of money increases 10% over that time, how much money did you make or lose on the car when looking at present cost?QUESTION 3When you were born, your grandparents put $5,000 in to a money market account to help with your college education. The bank gave them a guaranteed interest rate of 6% per year until you turned 18. How much money will be in the account on your 18th birthday if you never withdraw any money until that day?QUESTION 4Your company is eyeballing a new project in which they believe will cost $40,000 to start. They would like to spend this money and start the project 5 years from now. If they are able to invest money and recieve a 5% annual return, how much would they initially need to invest in order to start this project in 5 years?QUESTION 5You volunteer on a local fire department and are asked to help in the purchase of a new fire engine. You seek out a loan from a bank in which they state the annual interest on the loan would be 10%. However, the interest compounds once per quarter. What is the effective annual percentage rate (APR) if you select this loan?QUESTION 6You are interested in purchasing a new home for $200,000, but you need to save 20% of the price to get a convential loan. If you open a bank account with an APR of 9%, how much would you need to put in monthly in order to purchase the home in 5 years if intrest accrues monthly?QUESTION 7You want to purchase a new company car for employees to get around to see clients. The car you purchase ends up costing you $550 per month with interest compounding after each payment. If the loan has an APR of 7% and the length of the loan is 6 years, how much will you ultimately spend on the car?QUESTION 8Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends up costing $10,000 annually. If your company intends to use the building for 20 years, how much will this building be in present money if interest is 5%?

Explanation & Answer:
8 Questions




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