Answer Happy

Details of your solutions should be presented clearly in legible handwriting for your solutions to be graded. Solutions unaccompanied by sufficient computational detail will not be graded. Large quantities must be rounded to the nearest integer, and small quantities to the fourth decimal. All work that is presented for grading must belong to you alone. 1) If you invest $150,000 in an account that pays a nominal annual interest of 20% compounded quarterly, how much would you have in the account after 92 months? 2) If you want to accumulate t250,000 in your account in five years by making fixed end-of-the-month investments in an account that pays a nominal annual rate of 24% compounded monthly, what should be the size of your fixed payments? 3) You plan to make annual end-of-the-year payments of $50,000 into an account that pays an annual rate of 20% per year for 20 years with the first payment due at the end of year 6 and the last due at the end of year 25. How much money will you have in the account at the end of your investment horizon? 4) A plant that was built five years ago required a capital investment of $10 million. The plant index was 155 at the time it was built. You will build a plant that is double the size of the old one. If the plant index now stands at 312, how much would the plant cost? (Use a capacity factor equal to 2/3.) 5) The first item of a batch took 5 hours to produce. If the learning parameter is 80%, how much time would it take to produce the first seven items? 6) The demand function for a product is given by D=5000-50*P and the cost function is given by C=5000+20*D. What is the maximum profit? (Please pay attention to the fact that demand is given as a function of price, and not the other way around as outlined in our course slides.)