Exam 20: Engineering Economics

If you take out a $15,000 student loan on the first day of September, and promise to pay 6% APR compounded annually, how much interest would you pay if you repay the loan at the end of the following May?

The stated or quoted interest rate is called the effective interest rate, and the actual earned interest rate is called the nominal interest rate.

The percentage of par value that is paid to the bond holder at regular intervals is known as

An initial deposit of $500 earns 8% interest (APR), compounded quarterly.How much will be in the account at the end of 10 years?

If you put $4000 in a CD (certificate of deposit), what fixed interest rate compounded quarterly would yield $5000 at the end of three years?

If you take out a $15,000 student loan on the first day of September, and promise to pay 6% APR compounded annually, how much interest would you pay if you repay the loan at the end of the following May?

You have taken out a mortgage for a new home in the amount of $250,000.You have agreed to repay the mortgage in 15 years.What is your monthly payment if you agree to pay an interest rate of 6.5% compounded monthly?

If you deposit $100 into an account that pays 5% compounded quarterly, how many years will it take to reach a value of $444?

Your parents gives you $12,000 as a college graduation gift.They tell you that it's from a $2790.70 investment they made when they first got married that paid 11% simple interest.How long ago was their investment made?

If you deposit $100 into an account that pays 5% APR compounded semiannually, what would be the value in the account after 30 years?

When a bond is issued, it will have

You have $1000 to invest and your local banker presents two options.Option A is to put the money into a certificate of deposit (CD) for 5 years at an interest rate of 6.5% compounded continuously.Option B is to put the money in a savings account at 7.5% simple interest for 5 years.At the end of 5 years, which investment yields a higher return, and by how much?

If you take out a $15,000 student loan on the first day of September, and promise to pay $6 \%$ APR simple interest, how much interest would you pay if you repay the loan at the end of the following May?

The Straight Line and the Modified Accelerated Cost Recovery System (MACRS) are examples of

What is the effective interest rate corresponding to the nominal rate of 5% compounded semiannually.

If you deposit $5,000 into a 6-month CD (certificate of deposit) that pays 7.5% APR compounded quarterly, what is its value at maturity?

What interest rate, compounded quarterly, would cause an investment to double in twelve years?

What is the effective interest rate corresponding to the nominal rate of 21% compounded weekly.

The par value of a bond is

If you put away a fixed amount each month, at 10% APR compounded monthly, in order to have $5000 in 3 years, how much will you have paid during that time?