Page 292 - Analysis, Synthesis and Design of Chemical Processes, Third Edition

c. What will be the value of your savings account at the end of year 25?

You begin work on June 1 and work until August 31, and receive pay on the last day of the month.
Your expenses for these three months are $1500/mo. At the end of September, you make a $7000
payment, and you make an identical payment at the end of January. Your expenses from September 1
through April 30 are $1000/mo.
a. Draw a discrete, nondiscounted cash flow diagram for this situation.
20. b. If you earn 4% interest, compounded monthly, on the money until it is spent, what monthly
salary is required from June 1 through August 31 to break even on May 30?
c. If you earn 4% interest, compounded monthly, on the money until it is spent and the salary is
$4000/mo, how much would you have to earn each month from a different job from
September through May to break even on May 31?
d. What situation is depicted in this problem?

The cash flows for a bank account are described by the discrete CFD in Figure P9.10. The bank
account has an effective annual interest rate of 4.5%.
a. Calculate the future value of all cash flows after 15 years.
b. Calculate the future value of all cash flows after 25 years assuming that there are no more
transactions after year 15.

Figure P9.10 Purchased Cost per Unit of Flowrate of a Centrifugal Air Blower (Adapted from
Reference [3])

21.

You begin to contribute to an investment plan with your company immediately after graduation, when
you are 23 years old. Your contribution plus your company’s contribution total $6000/yr. Assume that
you work for the same company for 40 years.
22. a. What effective annual interest rate is required for you to have $1 million in 40 years?
b. Repeat Part (a) for $2 million.
c. What is the future value of this investment after 40 years if the effective annual interest rate
is 7% p.a.?

An IRA is an investment vehicle available to most individuals to save for retirement. The benefit is
that the interest is not taxed until you withdraw money, and most retirees are in a lower tax bracket
than when they worked. Under current laws, the maximum annual contribution is $4000 until age 50
and $5000 thereafter, including the year one turns 50. Suppose that you make the maximum