Scribd
Upload
11 views1 page

Sheet 2

The document outlines various engineering economics problems related to interest calculations, loan repayments, and investment returns. It includes scenarios involving simple and compound interest, cash flow analysis, and future value calculations. The problems are designed for students at Benha University, specifically within the Mechanical Engineering Department for the 2024/2025 academic year.

Uploaded by

abdallah372002
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
11 views1 page

Sheet 2

The document outlines various engineering economics problems related to interest calculations, loan repayments, and investment returns. It includes scenarios involving simple and compound interest, cash flow analysis, and future value calculations. The problems are designed for students at Benha University, specifically within the Mechanical Engineering Department for the 2024/2025 academic year.

Uploaded by

abdallah372002
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Benha University Engineering Economics

Benha Faculty of Engineering M 1482


Mechanical Engineering Department 2024/2025

Sheet 2
1) Calculate the interest earned and the total amount at the end of 4 years of investment of $1,000 at:
a. An annual simple interest rate of 5% for 4 years.
b. An annual compounded interest rate of 5% for 4 years.

2) Today, Julie borrowed $5000 to purchase furniture for her new house. She can repay the loan after
5 years in either of the two ways described below. Determine the engineering economy symbols
and their value for each option.
a. with simple interest based on 10% per year.
b. with compound interest based on 10% per year.

3) An employee at LaserKinetics.com borrows $10,000 on May 1 and must repay a total of $10,700
exactly 1 year later. Determine the interest amount and the interest rate paid.

4) Sandy, a manufacturing engineer, just received a year-end bonus of $10,000 that will be invested
immediately. With the expectation of earning at the rate of 8% per year, Sandy hopes to take the
entire amount out in exactly 20 years to pay for a family vacation when the oldest daughter is due
to graduate from college. Find the amount of funds that will be available in 20 years.

5) CGK Rheosystems makes high-performance rotational viscometers capable of steady shear and yield
stress testing in a rugged, compact footprint. How much could the company afford to spend now on
new equipment in lieu of spending $200,000 one year from now and $300,000 three years from now,
if the company uses an interest rate of 15% per year?

6) Each year Exxon-Mobil expends large amounts of funds for mechanical safety features throughout its
worldwide operations. Carla Ramos, a lead engineer for Mexico and Central American operations,
plans expenditures of $1 million now and each of the next 4 years just for the improvement of field-
based pressure-release valves. Construct the cash flow diagram to find the equivalent value of these
expenditures at the end of year 4, using a cost of capital estimate for safety-related funds of 12% per
year.

7) A father wants to deposit an unknown lump-sum amount into an investment opportunity 2 years from
now that is large enough to withdraw $4,000 per year for state university tuition for 5 years starting 3
years from now. If the rate of return is estimated to be 15.5% per year, Calculate deposited amount.

Best Wishes for all,


Dr / Abdelrahman Elgendy

[1]

You might also like