ENGR 345- Summer 2002 QUIZ 1

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ENGR 345- Summer 2002 The Quiz Book
Prepared by Eng. Ahmed Taha
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ENGR 345- Summer 2002QUIZ 1
       

• If you deposit 100 today in an account that pays
  10 in profit, how much would the account have
  after a. One year? b. Two years?
• F P(1i)n ? F 100(1.1)1 110
• F P(1i)n ? F 100(1.1)2 121

• How much should you deposit today to get a total
  of 600 a year later if the interest rate is 20?
  
• P F/ (1i)n ? P 600/1.2 500

• Please indicate whether each of the following
  statements is True of False by circling T or F,
  respectively.

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ENGR 345- Summer 2002QUIZ 2
       

• Construct a cash flow diagram of the following
  activities on the same bank account deposit
  3000 now, withdraw 1000 2 years from now.

• Construct a cash flow diagram of the following
  activities on the same bank account deposit
  3000 now, withdraw 1000 2 years from now.

1000
1
2
3000

• In the scenario above, how much do you expect to
  have in the account 5 years from now if the
  interest rate is 10?
• F P (F/P,10,5) 1000 (F/P,10 , 3)
• F 3000 (1.6105) 1000 (1.3310) 3500.5

• At what interest rate would 100 today become
  150.3657 after 5 years?
• 150.3657 100 (F/P, i , 5) ? (F/P, i , 5)
  1.503657
• Using interpolation I F/P
• _at_ n 5 8 ? 1.4693
• i ? 1.503657
• 9 ? 1.5386
• ? i 8.53

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ENGR 345- Summer 2002QUIZ 3
       

• Show that

• Show that
• F A (1i)n-1 A (1i)n-2 ..A taking A as a
  common factor
• A (1i)n-1 (1i)n-2 . 1
• A (1i)n-1 (1i) -1/ ((1i)-1) ?

• How much should you invest each year to get
  30,000 after 5 years if the expected annual
  profit rate is 15?
• F A (F/A, 15 , 5)
• A 30000/ (F/A, 15 , 5) 4449.46

• As you know, I went yesterday to renew my car
  registration. I opted for an option to pay the
  registration fee for 3 years in one lump sum for
  the convenience of not having to visit the
  traffic department every year. If the
  registration fee is L.E. 200 per year and does
  not change over time, how much did I pay for this
  convenience in present terms at a 10 rate?
• F1 600 (F/P,10, 2) 726
• F2 200 (F/A,10, 2) 200 (F/P,2,10) 662
• The difference using F 64
• The difference using P 52.9

0
1
2
0
200
200
200
600
F1
F2
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ENGR 345- Summer 2002QUIZ 4

• How long does it take to pay off a loan of 3,000
  (received today) when making equal payments of
  1000 annually
• starting a year from today?
• starting 3 years from today?
• (Assume i 10, you may use factor tables from
  the textbook)
• 3000 1000 (P/A, 10, n)
• (P/A, 10, n) 3 ? n ? 4 years.
• 3000 1000 (P/A, 10, n-2) (P/F, 10, 2)
• ? (P/A, 10, n-2) 3.63 ? n-2 ? 5 years ? n
  7.

3000
1
n
0
1000
3000
1
2
3
n
0
1000

• Draw a cash flow diagram for an arithmetic
  gradient with a base equal to the gradient at
  200 for n 5

0
1
2
3
4
5
200
400
600
800
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ENGR 345- Summer 2002QUIZ 5

• A deposit of 2,000 will be made every 2 years,
  starting after 2 years, in an account that pays
  an annual interest rate of 12. How much would
  this account have
• After 8 years?
• After 9 years?
  (you may use factor tables from the textbook)
• Assuming a unit time of 2 years
• ia (1.012)2 1 25.44
• F8 2000 (F/A,25.44,4)
• 2000 ((1.2544)4 1)/0.2544) 11603.48
• F9 F8 (F/P,12,1) 12995.9

       
Actual time

• What is r, if ia 0.26247696 and compounding is
  quarterly?
• ia (1r/m)m
• ln (ia1) m ln (1r/m)
• (ln (ia1))/4 ln (1r/4)
• Let (ln (ia1))/4 X
• ex 1 r/4
• ? r 24