Solution Manual for An Elementary Introduction to Mathematical Finance, 3rd Edition

Chapter 2: Time Value of Money 2.1)= I (iP = ) N (0.06)($2, 000)(5) = $600 2.2) • Simple interest: = F P (1 + iN ) = $6, 000 $3, 000(1 + 0.08 N ) N = 12.5 years (or 13 years) • Compound interest: $6, 000 $3, 000(1 + 0.07) N = 2 = 1.07 N log 2 = N log 1.07 N = 10.24 years (or 11 years) 2.3) • Simple interest: = I (iP = ) N (0.07)($15, 000)(25) = $26, 250 • Compound interest: I= P (1 + i ) N − 1= $15, 000 (1.07) 25 − 1 = $66, 411.50 2.4) • A : Simple interest: = I (iP = ) N (0.06)($10, 000)(15) = $9, 000 • B : Compound interest: I= P (1 + i ) N − 1= $10, 000 (1.055)15 − 1 = $12,324.76 B is a better option. © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication Page 1 is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a|retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 2.5) • Compound interest: = F $1, 000(1 + 0.065)5 = $1,370.09 • Simple interest: = F $1, 000(1 + 0.068(5)) = $1,340 The compound interest option is better. 2.6) • Loan balance calculation: End of period 0 1 2 3 4 5 Principal Payment $0.00 $1,670.92 $1,821.30 $1,985.22 $2,163.89 $2,358.64 Interest Payment $0.00 $900.00 $749.62 $585.70 $407.03 $212.28 Remaining Balance $10,000.00 $8,329.08 $6,507.78 $4,522.56 $2,358.67 $0.00 2.7) = P $5, 000( = P / F , 7%,5) $5, = 000(0.7130) $3,565 2.8) = F $25, 000( = F / P,8%, 2) $25, = 000(1.1664) $29,160 2.9) • Alternative 1 P = $100 • Alternative 2 = P $120( P= / F ,10%, 2) $120(0.8264) = $99.168 • Alternative 3 = P $170( P= / F ,10%,5) $170(0.6209) = $105.553 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 • Alternative 3 is preferred 2.10) F $1, 000( = = F / P,5%,3) $1, = 000(1.1576) $1,157.6 2.11) F $500(= = P / F ,9%,5) $500(0.6499) = $324.95 2.12) i = 10.5% , two-year discount rate is (1 + 0.105) 2 = 1.221(22.1%) 2.13) (a) = F $6, 000( = F / P, 6%,8) $6, = 000(1.5938) $9,563 (b) = F $1,550(= F / P,5%,12) $1,550(1.7959) = $2, 784 (c) = F $8, 000( = F / P,9%,32) $8, = 000(15.7633) $126,106 (d) = F $12, 000( = F / P,8%,9) $12, = 000(1.999) $23,988 2.14) (a) = P $5,500( = P / F ,10%, 6) $5,500(0.5645) = $3,105 (b) = P $7, 000( = P / F ,9%,3) $7, = 000(0.7722) $5, 405 (c) = P $22, 000( = P / F ,8%,5) $22, = 000(0.6806) $14,973 (d) = P $13, 000( = P / F , 7%,8) $13, = 000(0.5820) $7,566 2.15) (a) = P $8, 000( = P / F ,8%,5) $8, = 000(0.6806) $5, 445 (b) = F $10, 000( = F / P,8%, 4) $10, = 000(1.3605) $13, 605 2.16) = F 3= P P(1 + 0.07) N log 3 = N log 1.07 N = 16.24 years (or 17 years) 2.17) = F 2= P P(1 + 0.06) N log 2 = N log 1.06 N = 11.896 years (or 12 years) 2.18) • Rule of 72: 72 / 8 = 9 years © 2013 Pearson Education, Inc., Upper Saddle River, NJ. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 = F 2= P P(1 + 0.08) N log 2 = N log 1.08 N = 9 years 389 2.19) = F $1(1.08) = $10, 042, 477,894, 213 2.20) = P $35, 000( P / F ,9%, 4) + $10, 000( P / F ,9%, 2) = $35, 000(0.7084) + $10, 000(0.8417) = $33, 211 2.21) = P $450, 000( = P / F ,5%,5) 450, = 000(0.7835) $352,575 2.22) • Simple interest (John): = I iPN = (0.1)($1, 000)(5) = $500 • Compound interest (Susan): I= P (1 + i ) N − 1= $1, 000 (1 + .095)5 − 1 = $574.24 • 2.23) P= 2.24) Susan’s balance will be greater by $74 (or $74.24 to be exact) $2, 000 $800 $1, 000 + + = $3, 230.65 1.11 1.12 1.13 P= $3, 000 $3,500 $4, 200 $6,500 + + + = $14, 292.8 1.052 1.053 1.054 1.055 2.25) = F $2, 000( F / P,8%,10) + $3, 000( F / P,8%,8) + $4, 000( F / P,8%, 6) = $16, 218 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 2.26) = P $3, 000, 000 + $2, 400, 000( P / A,8%,5) + $3, 000, 000( P / A,8%,5)( P / F ,8%,5) = $20, 734, 774.86 2.27) = P $3, 000( P / F ,9%, 2) + $4, 000( P / F ,9%,5) + $5, 000( P / F ,9%, 7) = $7,859.7 2.28) • Method 1: = F $2, 000(1.05)(1.1)(1.15) + $3, 000(1.1)(1.15) + $5, 000 = $11, 451.5 • Method 2: $6,451.50  F= $2, 000(1.05) + $3, 000 ) (1.10)(1.15) + $5, 000 (   $5,100 = $11, 451.50 2.29) $180, 000 = $20, 000( P / A,9%,5) − $10, 000( P / F ,9%,3) + X ( P / F ,9%, 6)180, 000 − 20, 000(3.8897) + 10, 000(0.7722) = X (0.5963) X = $184,350.16 2.30) F= $80, 000 = $10, 000(1.08)5 + $12, 000(1.08)3 + X (1.08) 2 X = $43, 029.99 2.31) 4 100(1.08) = 8(1.08)3 + 9(1.08) 2 + 10(1.08) + 11 + X X = $93.67 This is the minimum selling price. If John can sell the stock for a higher price than $93.67, his return on investment will be higher than 8%. © 2013 Pearson Education, Inc., Upper Saddle River, NJ. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 2.32) P = $60, 000 $77, 000 $65, 000 $57, 000 45, 000 + + + + = $212,873.89 1.14 1.142 1.143 1.144 1.145 2.33) F $5, 000( = = F / A, 6%,10) $5, = 000(13.1808) $65,904 2.34) (a) = F $5, 000( = F / A,5%, 7) $5, = 000(8.1420) $40, 710 F = $5, 000( F / A,5%, 7)(1.05) (b) = $5, = 000(8.1420)(1.05) $42, 745.50 2.35) (a) = F (b) = F (c) = F (d) = F $6, 000( = F / A, 6%, 6) $6, = 000(6.9753) $41,851.80 $8, = 000( F / A, 7.25%,9) $96,825.60 $15, 000( = F / A,8%, 25) $15, = 000(73.1059) $1, 096,588.50 $3, = 000( F / A,9.75%,10) $47, 242.80 2.36) (a) = A (b) = A (c) = A (d) = A $18, 000( = A / F ,5%,13) $18, = 000(0.0565) $1, 017 $11, 000( = A / F , 6%,8) $11, = 000(0.1010) $1,111 $8, 000(= A / F ,8%, 25) $8, = 000(0.0137) $109.6 $12, = 000( A / F , 6.85%,8) $1,176 2.37) A $250,= = 000( A / F ,5%,5) $250, = 000(0.1810) $45, 250 2.38) A $25, 000( = = A / F ,5%,5) $25, = 000(0.1810) $4,525 2.39) $35, 000 = $3, 000( F / A, 6%, N ) ( F / A, 6%, N ) = 11.6666 (1 + 0.06 ) − 1 = 11.6666 N 0.06 log(1.7) N ⋅ log(1.06) = N = 9.11 years 2.40) A = $10, 000( A / F ,9%,5) = $1, 670.92 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 2.41) F =$500(1.04)10 + $1, 000(1.04)8 + $1, 000(1.04)6 +$1, 000(1.04) 4 + $1, 000(1.04) 2 + $1, 000 = $6, 625.47 2.42) (a) = A (b) = A (c) = A (d) = A $18, 000( = A / P,8%,5) $18, = 000(0.2505) $4,509 $4, = 200( A / P,9.5%, 4) $1,310.82 $7, 700( = A / P,11%,3) $7, = 700(0.4092) $3,150.84 $23, 000( = A / P, 6%, 20) $23, = 000(0.0872) $2, 005.60 2.43) • Equal annual payment amount: = A $20, 000( = A / P,10%,3) $20, = 000(0.4021) $8, 042 • Loan balance calculation: End of period 0 1 2 3 Principal Payment $0.00 $6,042.00 $6,646.20 $7,310.82 Interest Payment $0.00 $2,000.00 $1,395.80 $731.18 Remaining Balance $20,000.00 $13,958.00 $7,311.80 $0 Interest payment for the second year = $1,395.80 2.44) (a) = P (b) = P (c) = P (d) = P $9, 000( = P / A, 6%,8) $9, = 000(6.2098) $55,888.20 $1,500( = P / A,9%,10) $1,500(6.4177) = $9, 626.55 $7,500( = P / A, 7.25%, 6) $35, 475 $9, = 000( P / A,8.75%,30) $52,529 0.0625 (1 + 0.0625 ) 2.45) (a) = ( A / P, 6.25%,36) = 0.07044 36 (1 + 0.0625) − 1 36 (1 + 0.0925) − 1 10.81064 = ( P / A,9.25%,125) = 125 0.0925 (1 + 0.0925 ) 125 (b) 2.46) F $500(= = F / A, 7%,15)(1.07) $500(25.1290)(1.07) = $13, 444.02 2.47) A $5, 000( = = A / P,11%,5) $5, = 000(0.2706) $1,353 If you make the first payment on the loan at the end of the second year: © 2013 Pearson Education, Inc., Upper Saddle River, NJ. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 = F $5, 000( F / P,11%,1)( = A / P,11%, 4) $5, = 000(1.11)(0.3223) $1, 788.78 2.48) New equipment: $195,000 O&M cost: P $30, 000( = = P / A,10%,10) $30, = 000(6.1446) $184,338 New equipment isn’t worth buying. 2.49) P = −$3, 460 + 2.50) = P 250 = 0  I = 7.225% i 1, 000 = $10, 000 0.1 2.51) F= F1 + F2 = $5, 000( F / A,8%,5) + $2, 000( F / G,8%,5) = $5, 000( F / A,8%,5) + $2, 000( A / G,8%,5)( F / A,8%,5) = $5, 000(5.8666) + $2, 000(1.8465)(5.8666) = $50,998.35 2.52) = F $5, 000( F / A,10%,5) − $500( F / G,10%,5) = $5, 000( F / A,10%,5) − $500( P / G,10%,5)( F / P,10%,5) = $5, 000(6.1051) − $500(6.8618)(1.6105) = $25, 000.04 2.53) = P $100( P / F ,8%,1) + $150( P / F ,8%,3) +$200( P / F ,8%,5) + $250( P / F ,8%, 7) +$300( P / F ,8%,9) + $350( P / F ,8%,11) = $793.83 2.54) = A $30, 000 − $3, 000( A / G,8%,10) = $30, 000 − $3, 000(3.8713) = $18,386.1 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 2.55) = P $3, 000( P / A,12%,8) + $600( P / G,12%,8) = $3, 000(4.9676) + $600(14.4714) = $23,585.64 2.56) C ( P / G,9%, 6) = $1000( F / P,9%, 4) + $800( F / P,9%,3) + $600( F / P,9%, 2) +$400( F / P,9%,1) + $200 C (10.0924) = $3796.46 → 1, 000( F / P,9%, 4) + 800( F / A,9%, 4) − 200( P / G,9%, 4)( F / P,9%, 4) $376.17 ∴C = P = $6, 000( P / A1, 5%,9%, 40) 1 − (1.05 ) (1.09 ) = $6, 000 0.09 − 0.05 = $116,379.57 $116379.57 *( F / P,9%, 40) = $3, 655.412.47 40 2.57) −40 2.58) (a) = P $10, 000, 000( P / A1, − 10%,12%, 7) 1 − (1 − 0.1) (1 + 0.12 ) = $10, 000, 000 ⋅ 0.12 − ( −0.1) 7 −7 = $35, 620,126 (b) Note that the oil price increases at the annual rate of 5% while the oil production decreases at the annual rate of 10%. Therefore, the annual revenue can be expressed as follows: $100(1 + 0.05) n −1100, 000(1 − 0.10) n −1 An = = $10, 000, 000(0.945) n −1 = $10, 000, 000(1 − 0.055) n −1 This revenue series is equivalent to a decreasing geometric gradient series with g = -5.5%. N An © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 9 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 1 2 3 4 5 $10,000,000 $9,450,000 $8,930,250 $8,439,086 $7,974,937 $7,536,315 $7,121,818 6 7 = P $10, 000, 000( P / A1, − 5.5%,12%, 7) 1 − (1 − 0.055 ) (1 + 0.12 ) = $10, 000, 000 ⋅ 0.12 − ( −0.055 ) 7 −7 = $39, 746, 494.51 (c) Computing the present worth of the remaining series ( A4 , A5 , A6 , A7 ) at the end of period 3 gives P $8, 439, 086.25( P / A1 , −5.5%,12%, 4) = 1 − (1 − 0.055 ) (1 + 0.12 ) = $8, 439, 086.25 ⋅ 0.12 − ( −0.055 ) 4 −4 = $23, 782, 713 2.59) 20 ∑ A (1 + i) P = n =1 −n n 20 = ∑ (2, 000, 000)n(1.06) n −1 (1.06) − n n =1 20 1.06 n ) = (2, 000, 000 /1.06)∑ n( 1.06 n =1 20 = (2, 000, 000 /1.06)∑ n n =1 = (2, 000, 000 /1.06) 20(21) 2 = $396, 226, 415.1 2.60) (a) The withdrawal series would be: © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 Period Withdrawal 11 12 $3,000 $3,000(1.06) 13 $3,000(1.06) 2 14 $3, 000(1.06)3 15 $3, 000(1.06) 4 Equivalent worth of the withdrawal series at period 10, using i = 8%: P = $3,000(P / A1 ,6%,8%,5) ŹŹ= $3,000 ⋅ ( ) (1 + 0.08) 0.08 − (0.06 ) 1 − 1 + 0.06 5 −5 ŹŹ= $13,383.92 Assuming that each deposit is made at the end of each year, the following equivalence must be hold: $13,384 = A( F / A,8%,10) = 14.4866 A A = $923.88 (b) Equivalent present worth of the withdrawal series at 6% 5 = P $3, 000( P /= A1 , 6%, 6%,5) $3, = 000 $14,150.94 1 + 0.06 $14,151 = A(F / A,6%,10) = 13.1808A A = $1,073.60 2.61) = $1, 000, 000 A= ( F / A, 6%,30) A(79.0582)  A = $12,649 should be set aside on the account a) = $1, 000, 000 A= ( P / A, 6%, 20) A(11.4699)  A = $87,185 / year b) © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 11 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 $1, 000, 000 = A1 ( P / A1, 3%, 6%, 20) 1 − (1.03) (1.06 ) = A1 0.06 − 0.03 = $68, 674 / year 20 −20 2.62) $50 $70 $50 2C C 2C 5.52C + 2+ 3= + 2+ 3= 1.1 1.1 1.1 1.1 1.1 1.1 1.331 4.1473C → 140.8715 = C = $33.97 2.63) = P [$100( F / A,10%,8) + $50( F / A,10%, 6) +$50( F / A,10%, 4)]( P / F ,10%,8) = [$100(11.4359) + $50(7.7156) +$50(4.6410)](0.4665) = $821.70 2.64) 2.65) Select (a). P= −$500( P / F ,10%,1) + $300( P / A,10%,3)( P / F ,10%,1) +$800( P / F ,10%,5) = −$500(0.9091) + $300(2.4869)(0.9091) +$800(0.6209) P = $720.42 2.66) Computing the equivalent worth at period 3 will require only two different types of interest factors. © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 12 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 P1 = $200( P / A,10%,5)( F / P,10%,3) = $200(3.7908)(1.3310) = $1, 009.11 = P2 A( P / A,10%, 2)( F / P,10%,3) + A( P / A,10%, 2) = A(1.7355)(1.3310) + A(1.7355) = A(4.0455) A = $1, 009.11/ 4.0455 = $249.44 2.67) = P1,1 $200( P / A,10%, 4) − 100( P / A,10%, 2) = $200(3.1699) − 100(1.7355) = 460.43 P2,1= X + X ( P / A,10%, 4) = X + X (3.1699) = 4.1699 X P1,1 = P2,1 $460.43 = 4.1699 X X = $110.42 2.68) = P1 $50( P / A,10%, 4) + $35( P / A,10%, 2)( P / F ,10%, 2) = $50(3.1699) + $35(1.7355)(0.8264) = 208.6926 = P2 C ( P / A,10%, 4) + C ( P / A,10%, 2)( P / F ,10%,1) = C (3.1699) + C (1.7355)(0.9091) = 4.7476C P1 = P2 C = $43.96 2.69) © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. 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Fundamentals of Engineering Economics, 3rd ed. ©2012 = C ( F / A,9%,8) $5, 000( P / A,9%, 2) + $5000 = C (11.0285) $5, 000(1.7591) + $5000 C = $1, 250.90 2.70) The original cash flow series is n 0 1 2 3 4 5 6 7 8 9 10 An $0 $800 $820 $840 $860 $880 $900 $920 $300 $300 $300 – $500 2.71) 2C + C ( P / A,12%, 7)( P / F ,12%,1) = $1, 200( P / A,12%,8) − 400( P / A,12%, 4) 2C + C (4.5638)(0.8929) = $1, 200(4.9676) − 400(3.0373) 6.075C = $4, 746.20 C = $781.27 2.72) 200(1.06)(1.08)(1.12)(1.15) + X (1.08)(1.12)(1.15) + $300(1.15) = $1000 247.9 + 1.39104 X + 345 = 1000 1.39104 X = 360.1 X = $258.87 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 14 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 2.73) A( F / A,8%,18) = $20, 000 + $20, 000( P / A,8%,3) A(37.4502) = $20, 000 + $20, 000(2.5771) = $71,542 A = $1,910.32 2.74) = P1 $500 + $500( P / A,10%,5) = $500 + $500(3.7908) = $2,395.4 P2 = X [ ( P / A,10%, 4) ] = X [ (3.1699) ] = 2,395.4 ∴X = $755.67 2.75) P1,2 = X ( P / F ,8%,3) = X (0.7938) P2,2 = 800( P / A,8%,10) = 800(6.7101) = 5368.08 X = 6, 762.51 2.76) C ( P / A,9%,5)( P / F ,9%,1) = $4, 000 C (3.8897)(0.9174) = $4, 000 C = $1,120.95 2.77) © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 15 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 2.82) = $104(1 + i ) 25 $7.92( F / A, i %, 25)(1 + i )  (1 + i ) 25 − 1  = $7.92   (1 + i ) i   ∴ i =6.37% 2.83) The equivalent future worth of the prize payment series at the end of Year 20 (or beginning of Year 21) is F1 = $1,952,381( F / A, 6%, 20) = $1,952,381(36.7856) = $71,819,506.51 The equivalent future worth of the lottery receipts is = F2 ($36,100, 000 − $1,952,381)( F / P, 6%, 20) = ($36,100, 000 − $1,952,381)(3.2071) = $109,514,828.9 The resulting surplus at the end of Year 20 is = F2 − F1 $109,514,828.9 − $71,819,506.51 = $37, 695,322.4 2.84) $1, 000( F / P,9.4%,5) + $500( F / A,9.4%,5) (1 + 0.094)5 − 1 ) 0.094 = $1, 000(1.5671) + $500(6.0326) = $4,583.4 = $1, 000((1 + 0.094)5 ) + $500( $4,583.4( F / P,9.4%, 60) = $4,583.4((1 + 0.094)60 ) = $4,583.4(219.3) = $1, 005,141.21 The main question is whether or not the U.S. government will be able to invest the social security deposits at 9.4% interest over 60 years. © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 17 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458. Fundamentals of Engineering Economics, 3rd ed. ©2012 2.85) PContract =+ $3,875, 000 $3,125, 000( P / F , 6%,1) + $5,525, 000( P / F , 6%, 2) +6, 275, 000( P / F , 6%,3) + 6, 625, 000( P / F , 6%, 4) +7575000( P / F , 6%,5) + 8125000( P / F , 6%, 6) + $8,875, 000( P / F , 6%, 7) = $3,875, 000 + $2,550, 000(0.9434) + $5,525, 000(0.8900) +  + $8,875, 000(0.6651) = $39,548, 212.5 © 2013 Pearson Education, Inc., Upper Saddle River, NJ. All rights reserved. This publication is protected by Copyright and written permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. For information regarding permission(s), write to: 18 Rights and Permissions Department, Pearson Education, Inc., Upper Saddle River, NJ 07458.