ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.15 : Based on Time Discounting of Money, let y = x / (1 + r) ^ n, where ^ = power, r = interest rate for the period in decimal value, n = number of periods, y = current value, x = future value. According to Present Value Addition Rule, the present value of a set of future payments is equal to sum for present value of each of the payments. In an engineering business, 3 future payments are to be made : $100 after 1 year; $500 after 2 years; $200 after 3 years. (a) Form an equation of y as a function of r. (b) Find the value of y in 5 decimal places if r = 8 %.
- 1 Answers
- 1509 Views
- I also Faced
- E-Mail Answers
Answer Posted / kangchuentat
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.15 : (a) First future payment : n = 1, x = $100. Second future payment : n = 2, x = $500. Third future payment : n = 3, x = $200. Then total y = sum of x / (1 + r) ^ n = 100 / (1 + r) + 500 / (1 + r) ^ 2 + 200 / (1 + r) ^ 3. (b) When r = 8 % = 0.08, y = 100 / (1 + 0.08) + 500 / (1 + 0.08) ^ 2 + 200 / (1 + 0.08) ^ 3 = 680.02845 (5 decimal places). The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
| Is This Answer Correct ? | 0 Yes | 0 No |
Post New Answer View All Answers
Explain the use of gear pumps in motor?
What are some common problems associated with dilute phase pneumatic conveying?
For a given bulk solid how can the particle size distribution be determined?
Explain what are the affinity laws associated with dynamics pumps?
What's -74C, dew point is better the -70C dew point In draying unit .
Are there any special considerations to be taken into account for combusting ammonia?
What is gibbs free energy?
Explain how do you design a vapor-liquid separator or a flash drum?
Hi, I want to validate an analytical procedure of a specified impurity, but this impurity is unavailable for me. can I use the API instead of impurity in the linearity test? in Which reference can I find such information?
What is carbon sequestration?
Explain can large temperature differences in vaporizers cause operational problems?
Explain about different types of lamps?
What is screen analysis and what are its applications in the chemical industry?
What are the assumptions made for kynch theory?
Is there any way to slow coke formation in ethylene furnaces?
