Engineering Economics

Topic: Compound Interest

1. A company worker deposited $4,375 into a savings account at an annual interest rate of 7.5% compounded monthly. What will be the value of the investment after 14 years? (10pts)
2. What is the future amount and compound interest amount of a principal P12,600 borrowed at 10% compounded semi-annually for 4 years and 6 months? (10pts)
3. How many years will it take money to be five times the principal amount if it earns 8% compounded quarterly? (10pts)
4. Find the present worth of two (2) P10,500 payments that were made at the end of the second year and fifth year if the interest rate is 12%. Show the Cashflow Diagram (10pts)
5. Thirty years ago an amount of P8,000 was invested in a bank account. Today it is worth P24,000. What is the nominal interest rate of interest paid on this account if interest is compounded semi-annually? Show the Cashflow Diagram (10pts)