CIVL 2812—Project Appraisal (Semester 2, 2019)
CIVL 2812—Project Appraisal (Semester 2, 2021)
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Tutorial 3 Questions
Objectives A
• Understand time-money relationship through problem solving.
Objectives B
• Understand the concept MARR and be able to determine its value for a given project. Understand and
able to apply NPV, NFV and payback period methods to a given project.
ESSENTIAL QUESTIONS
Problem 4-103
You repay a student loan of $20,000 in equal monthly instalments over 5 years at a nominal interest rate of
24%, compounded on a monthly basis. The interest rate remains constant over the entire period of time. What
is the monthly repayment amount? (4.15)
Problem 4-106
A store offers you an unbelievably good deal on a premium washing machine, Advertised as being worth
$1,200. You can buy the machine in 6 monthly instalments of $200 at a 0% rate of interest! However, it seems
that this deal is too good to be true. A friend warns you that you are actually paying interest at an annual rate
of 36%! What is the actual value of washing machine today? (4.15)
Problem 4-113
If you face an effective annual interest rate of 10%, what must the nominal interest be? Assume that interest is
continually compounded. (4.16)
CIVL 2812—Project Appraisal (Semester 2, 2021)
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ESSENTIAL QUESTIONS
CIVL 2812—Project Appraisal (Semester 2, 2021)
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EXTENSION QUESTIONS
Problem 4-107
You borrow $5,000 from your bank, which you must repay in the next 48months through monthly instalments
at an APR of 6%. Alternatively, you can repay the loan in 60 months, but the APR is now 9%. (4.14, 4.15)
a. What is your monthly payment if you repay the loan in 48 months?
b. What is your monthly payments if you repay the loan in 60 months?
CIVL 2812—Project Appraisal (Semester 2, 2021)
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EXTENSION QUESTIONS
CIVL 2812—Project Appraisal (Semester 2, 2021)
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EXTENSION QUESTIONS