Engineering Economics Two Questions 7. If you plan to have $4,000,000 when you r
ID: 1140191 • Letter: E
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Engineering Economics Two Questions
7. If you plan to have $4,000,000 when you retire, how long will you be able to withdraw $500,000 per year if the account earns interest at a rate of 6% per year? (Hint: Use interpolation) 8. Corrosion problems -and manufacturing defects rendered a gasoline pipeline between El Paso and Phoenix subject to longitudinal weld seam failures. Therefore. the pressure was reduced to 80% of the de sign value. If the reduced pressure results in delivery of $100,000 per month less product, what will be the value of the lost revenue after a 3-year period at an interest rate of 1 1 .940397% per year, compounded continuously?Explanation / Answer
7.
Value at retirement will be=4000000
4000000=500000*((1-(1+6%)^(-n))/6%)
((1-(1+6%)^(-n))/6%)=4000000/500000
((1-(1+6%)^(-n))/6%)=8
(1-(1+6%)^(-n))=8*6%
1.06^(-n)=0.52
use natural log on both sides
-n=LN(0.52)/LN(1.06)
-n=-11.22
n=11.22 years
the above is answer..
we do only one question based on Chegg rule
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