4.7) Convert the given interest rates in the left-hand column into the nominal rates listed in the righthand column. (Assume 4 weeks/month.) Given Interest Rate Desired Interest Rate 1% per month Nominal rate per year 3% per quarter Nominal rate per 6 months 2% per quarter Nominal rate per year 0.28% per week Nominal rate per quarter 6.1% per 6 months Nominal rate per 2 years 4.25) A structural engineering consulting company is examining its cash flow requirements for the next 6 years. The company expects to replace office machines and computer equipment at various times over the 6-year planning period. Specifically, the company expects to spend $21,000 two years from now, $24,000 three years from now, and $10,000 five years from now. What is the present worth of the planned expenditures at an interest rate of 10% per year, compounded semiannually? 4.44) If you deposit $1000 per month into an investment account that pays interest at a rate of 6% per year, compounded quarterly, how much will be in the account at the end of 5 years? 4.52) U.S. Steel is planning a plant expansion that is expected to cost $13 million. How much money must the company set aside now in a lump-sum investment to have the money in 2 years? Capital funds earn interest at a rate of 12% per year, compounded continuously. 4.57) Find (a) the present worth P, and (b) the equivalent uniform annual worth A for the cash flows shown below.
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- 1% per month: Nominal rate per year = 1% * 12 months = 12% - 3% per quarter: Nominal rate per year = 3% * 4 quarters = 12% - 2% per quarter: Nominal rate per year = 2% * 4 quarters = 8% - 0.28% per week: Nominal rate per year = 0.28% * 52 weeks = 14.56% - 6.1% Show moreā¦
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