After Completing This Chapter...
The student should be able to:
·Solve problems modeled by the uniform series compound interest formulas.
·Use arithmetic and geometric gradients to solve appropriately modeled problems.
·Applynominalandeffective interest rates.
·Usediscreteandcontinuouscompounding in appropriate contexts.
· Use spreadsheets and financial functions to model and solve engineering economic
analysis problems..QUESTIONS TO CONSIDER .::;,1.Set aside your calculator and test your intuition for a minute. What annual rate of return
do you suppose it would take to turn $5000 into $20 million in 51 years? 100%? 200%?- Now get out the calculator. What was Anne Scheiber's actual average annual rate of
return during the years she was investing?
- How does that rate compare with the overallperformance of the stock market during the
period from 1944 to 1995?