Industrial Engineering IP

(1)

Muhammad Arif Naufal 18522032

1. A man deposits $500 now. The credit union pays 5% compounded annually. At the end of five years, how much will he have in his account?

Year Principa

l Interes

t (5%)

Amoun t owned

Amoun t paid USD

500 1

USD 25

USD 525 2

USD 26

USD 551

3 USD

28 USD

579

4 USD

29 USD

608 5

USD 30

USD 638

So, the amount of money owned by the man after 5 years is 638 US Dollar.

2. If $500 were deposited in a bank savings account, how much would be in the account three years hence if the bank paid 6% interest compounded annually?

(2)

Year Principa l

Interes t (5%)

Amoun t owned

Amoun t paid USD

500

1 USD

30 USD

530 2

USD 32

USD 562 3

USD 34

USD 596

So, the amount of money owned by the man after 5 years is 596 US Dollar.

3. Iselt Welding has extra funds to invest for future capital expansion. If the selected investment pays simple interest, what interest rate would be required for the amount to grow from $60,000 to $90,000 in 5 years?

90,000-60,000=30,000

30,000/5=6,000 per year or 10% per year.

So, the interest rate is 10% per year.

(3)

4. a solid waste disposal company borrowed money at 10% per year interest to purchase new haulers and other equipment needed at the company owned landfill site. If the company got the loan 2 years ago and paid it off with a single payment of $4,600,000, what was the principal amount P of the loan?

F = P (1+i)^n

$4,600,000 = P (1+0,1)^2

$4,600,000 = P X 1,21

P = $ 3,801,653

So, the principal amount P of the loan is $ 3,801,653

5. If you wish to have $800 in a saving account at the end of four years, and 5% interest compound was paid annually, how much should you put into the savings account now?

Year Principa

l Interes

t (5%)

Amoun t owned

Amoun t paid USD

800 1

USD 40

USD 840

2 USD

42 USD

882

3 USD

44 USD

926

4 USD USD USD

(4)

46 972 972