ECE 192, Spring 2023

Assignment -3 Solution

Problem-1 Solution

P=0.25×280,000
→ 𝑃 = $70,000
𝑖𝑟 = 0.085
𝑚 = 12
𝑁 = 20 𝑦𝑒𝑎𝑟𝑠

𝑖(1 + 𝑖)𝑁
𝐴 = 𝑃(𝐴/𝑃, 𝑖, 𝑁) = 𝑃
(1 + 𝑖)𝑁 − 1
We need to find the effective interest rate, which is the actual rate, found by converting the given
interest compounded monthly.
𝑖𝑟 𝑚 0.085 12
𝑖𝑒 = (1 + ) − 1 = (1 + ) −1
𝑚 12
→ 𝑖𝑒 = 8.839 %/𝑦𝑒𝑎𝑟

𝐴 = 70,000(𝐴/𝑃, 8.839%, 20)

0.08839 × (1.08829)20
𝐴 = 70,000 ( )
(1.08829)20 − 1

→ 𝐴 = 7,580.47 $/𝑦𝑒𝑎𝑟

Since we know the daily energy demand, we can find the yearly energy as follows:

365 𝑑𝑎𝑦𝑠
𝐸𝑦𝑒𝑎𝑟 = 𝐸𝑑𝑎𝑦 × ( )
1 𝑦𝑒𝑎𝑟

𝑘𝑊ℎ 365 𝑑𝑎𝑦𝑠 𝑘𝑊ℎ

𝐸𝑦𝑒𝑎𝑟 = 85 ( )×( ) = 31,025 ( )
𝑑𝑎𝑦 1 𝑦𝑒𝑎𝑟 𝑦𝑒𝑎𝑟

The price for electricity will be:

𝐴 7,580.47($/𝑦𝑒𝑎𝑟)
𝑇𝑎𝑟𝑖𝑓𝑓 = = = $24.4(𝑐/𝑘𝑊ℎ)
𝐸𝑦𝑒𝑎𝑟 31,025(𝑘𝑊ℎ/𝑦𝑒𝑎𝑟)

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ECE 192, Spring 2023

Problem-2 Solution

Problem-3 Solution

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ECE 192, Spring 2023

Problem-4 Solution

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ECE 192, Spring 2023

Problem-5 Solution

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 ECE 192, Spring 2023

Problem-6 Solution

We calculate first the equivalent interest rate for a 10-yeaar period

𝒊 = (𝟏 + 𝟎. 𝟎𝟓)𝟏𝟎 − 𝟏 = 𝟎. 𝟔𝟐𝟖𝟖 𝒐𝒓 𝟔𝟐. 𝟖𝟖%

The present value of a uniform series with infinite number of periods is given as follows:

(𝟏 + 𝒊)𝑵 − 𝟏 𝑨
⁄
𝑷 = 𝐥𝐢𝐦 𝑨(𝑷 𝑨 , 𝒊, 𝑵) = 𝐥𝐢𝐦 𝑨 ( ) =
𝑵→∞ 𝑵→∞ 𝒊(𝟏 + 𝒊)𝑵 𝒊

Then, the present worth will be equal to:

𝟐𝟎𝟎, 𝟎𝟎𝟎
𝑷= + 𝟏, 𝟓𝟎𝟎, 𝟎𝟎𝟎 = $𝟏, 𝟖𝟏𝟖, 𝟎𝟏𝟖. 𝟐𝟗
𝟎. 𝟔𝟐𝟖𝟖