Chapter 2: Factors, Effect of Time & Interest on Money

•Who has more saving money at year 30?

• Mr. A

• Mr. B

•Who has more saving money at year 30?
with Rate of Return 8% per year

• Mr. A

• Mr. B

A person deposits $5000 into an account which pays interest at a rate of 8% per year. 
The amount in the account after 10 years is closest to:

• 2,792

• 9,000

• 10,795

• 12,165

A small company wants to make a single deposit now so it will have enough money to

purchase a backhoe costing $50,000 five years from now.  If the account will earn

interest of 10% per year, the amount that must be deposited now is nearest to:

• $10,000

• $31,050

• $33,250

• $319,160

Show present worth at present time, t = 0. If Mr. Sompong deposit $5000 at 10 years ago,
$10,000 at 5 years ago, and $20,000 a year ago, the bank pays interest at a rate of 8% per year

A chemical engineer believes that by modifying the structure of a certain water

treatment polymer, his company would earn an extra $5000 per year. At an interest

rate of 10% per year, how much could the company afford to spend now to just

break even over a 5 year project period?

• $11,170

• $13,640

• $15,300

• $18,950

An industrial engineer made a modification to a chip manufacturing process that will save her company $10,000 per year. At an interest rate of 8% per year, how much will the savings amount to in 7 years? 

• $45,300

• $68,500

• $89,228

• $151,500

The present worth of $400 in year 1 and amounts increasing by $30 per year through year 5 at an interest rate of 12% per year is closest to:

• $1,532

• $1,634

• $1,744

• $1,829

The present worth of $400 in year 1 and amounts increasing by $30 per year through year 5 at an interest rate of 12% per year.

Could the cash flow be converted into an A value?

Find the present worth of $1,000 in year 1 and amounts increasing by 7% per year through year 10.
Use an interest rate of 12% per year.

• $5,670

• $7,333

• $12,670

• $13,550