Faculty of Engineering

FORM Ω
Mechanical Engineering Department
FORM A
Engineering Economy and Projects Management
ME304/ First Exam
First Semester 2017-2018

Student Name:…………………………. Serial Number:……………………

SEC1: SUN, TUS & THU 11:30-12:30 OR SEC2: MON & WED 10:00-11:30
PART 1 :( 2 points each)
You have 11 multiple choice questions, for each one fill the correct answer in the following
table:
ANSWERS (USE CAPITAL LETTERS ONLY)
1 2 3 4 5 6 7 8 9 10

1) In the following cash flows diagram,

Determine the value of F if the interest rate
i = 12% per year?

A) $780 B) $980 C) $1080 D) $800 E)$900 F)$580

2) The price of land in 2003 was 100 JD per m2 and in 2011 rises to 230 JD per m2. how
many years (after 2011) will it take to pay 300 JD per m2 and more (assume the interest
rate will be constant)?

A)20 years B)11 years C)8 years D)3 years E)2 years F)can’t be
solved

3) What is the present equivalent of 1000$ to be received after 5 years at 5% simple

interest rate per year?

A)$800 B)$1,250 C)$784 D)$12,764 E)$1,200 F)$730

4) If P= $1,500 and A = $300, and i% = 10% per year, then N=??

 A) 9years B)8years C)10years D)13years E)5years F)2years

A bank charges an interest rate of 18% per year compounded monthly. Answer the following
to questions.

5) How much must be invested now to provide an annuity of 10,000 per year for 6 years
starting 12 years from now?

A) $11,511 B)$5,670 C)$8,505 D)$7,067 E)$4,711 F)$3,800

6) The effective interest rate per month equals to?

A)19% B)1.5% C)2% D)5% E)16.3% F)None of
them

7) Assume you borrow $10,000 today and promise to repay the loan in two equal payments,
one in year 2 and the other in year 5, At an interest rate of 10% per year, the size of the
payments is equal to :

A)$12,100 B) $16,105 C) $20,230 D)$6,909 E)$17,274 F) $6,120

8) How much money should be deposited starting 2 years from now and lasts for 6 years in
order to withdraw $2,500 each year for 5 years starting 12 years from now? Let i = 10%
per year?
A)$5,260 B) $3,653 C) $1,066 D) $740 E) $1,207 F) $839

9) A sum of $5,000 today is equivalent to how much money 8 years back if the interest rate
is 8% per year compounded semiannually?
A) $9,365 B) $9,254 C) $13,673 D) $13,511 E) $9,990 F) $6,842

10) The owner of a small business borrowed $70,000 with an agreement to repay the loan
with quarterly payments over a five year time period. If the interest rate is 12% per year
compounded quarterly, his loan payment each quarter is nearest to:

A)$4,704 B)$6,384 C)$15,288 D)$20,748 E)$26,353 F)$19,418

11) In the following cash flows diagram, Determine the value of F ?

A)$3,348 B)$3,300 C)$3,260 D) $3,370 E)$3,000 F)$3,327

Part#2: (3 points)

Nermeen places $1,000 in a savings account today and plans to invest an amount of money at
the end of each quarter (A) in order to have $6,000 at the end of year4. Assume the bank
pays 12% per year compounded quarterly. How much money must be invested per
quarter(A)?

Sol: