AIN SHAMS UNIVERSITYFACULTY OF ENGINEERINGNew Program in Engineering (Freshmen) -Fall Z0A9Engineering Economics (HUMN240)

Ass.#l

Basic Concepts. Terms and Graphic1) How much money will your friend have after 4 years if she saves $1000 now at 7;/o peryear simple interest?

2) How much can you borrow today if you pay $850 two years from now at an interest rateof 60/o per year compounded yearly?

3) If you borrow $1500 now and must repay $1350 two years from now, what is the loan'sannual interest rate?

4) You have just invested $10,000 in a friend's business venture that promise to return$15,000 or more at some time in future. What is the minimum number of years (whotenumber) that you can wait to receive the $15,000 in order to make l0o/o or more per yearcompounded yearly?

5) If you invest S3500 now in return for a guaranteed $5000 income at a later date, whenmust you receive your money in order to earn exactly 8%o per year simple interest?

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6) Assume you want a MARR of Soh per year compounded annually on yourinvestment in a college education and that you expect to receive an ammi. of $60,000 tenyears after the year you graduate. What is the equivalent amount you could have investedin a college education during just your last year in college?

@,O.u* a cash-flow diagram for the following: Deposit $100 per year starting 1 year from now.Withdraw the entire amount 15 years from now. The expected earning rate l\oh per year.

8) Construct a cash-flo1v d[ggram which will assist in calculating the currentequivalent value of an-dk-f,enditure of $850 per year for 6 years that starts 3years from now, ifthe interest rate is 137o per year.

9) Define the economy symbols and draw the cash-flow diagram for thefollowing; Invest $100,000 now in a real-estate venture, sell the property 10years from now, and make l2o/o per year return on your investment.

10) Joey hopes to purchase a boat in 5 years and believes he must double the size of thestock portfolio set aside as his "boat Kitty". Estimate the rate of return at which hisportfolio must grow if interest is (a) simple and (b) compound.

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