16 pts Rose is a project manager at a civil engineering firm

(16 pts) Rose is a project manager at a civil engineering firm. She has been collecting data on a project in which concrete pillars were being constructed, however not all of the data are available. She has been able to find out that the 15th pillar required 200 man-person hours to construct, and that a 60% learning curve man-hour, what is: a) The time required to produce the 1st pillar b) The time required to produce the 25th pillar d) The average time to produce the first 5 pillars e) The total cost of producing the first 5 pillars applied. If construction costs are S219.21 per

Solution

5.

R = 1% monthly

Time n = 84 months

Down payment = $10000

Monthly payment = $700

Price of the most expensive home = down payment + present value of the monthly payments

Price of the most expensive home = 10000 + 700*(1-1/1.01^84)/.01

Price of the most expensive home = $49653.92

6.

Correct Answer:

iii. 11.95%, compounding monthly

Working note:

Effective rate when 12% compounding quarterly = (1+12%/4)^4 - 1 = 12.55%

Effective rate when 11.85% compounding daily = (1+ 11.85%/365)^365 - 1 = 12.58%

Effective rate when 11.95% compounding monthly = (1+11.95%/12)^12 – 1 = 12.63%

Effective rate when 11.82% compounding continuously = e^.1182 - 1= 2.7182^.1182 – 1 = 12.55%

So, the best rate is 11.95%, compounding monthly.

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