Lecture No7c3.ppt

# Lecture No7c3.ppt - Contemporary Engineering Economics 4 th...

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Contemporary Engineering Economics, 4 th edition, © 2007 Interest Formulas – Equal Payment Series Lecture No.7 Chapter 3 Contemporary Engineering Economics Copyright © 2006

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Contemporary Engineering Economics, 4 th edition, © 2007 Equal Payment Series 0 1 2 N 0 1 2 N A A A F P 0 N
Contemporary Engineering Economics, 4 th edition, © 2007 Equal Payment Series – Compound Amount Factor 0 1 2 N 0 1 2 N A A A F 0 1 2 N A A A F =

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Contemporary Engineering Economics, 4 th edition, © 2007 Process of Finding the Equivalent Future Worth, F 0 1 2 N 0 1 2 N A A A F A (1+ i ) N -1 A (1+ i ) N -2 1 2 (1 ) 1 (1 ) (1 ) N N N i F A i A i A A i L A
Contemporary Engineering Economics, 4 th edition, © 2007 Another Way to Look at the Compound Amount Factor

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Contemporary Engineering Economics, 4 th edition, © 2007 Equal Payment Series Compound Amount Factor (Future Value of an Annuity) F A i i A F A i N N ( ) ( / , , ) 1 1 Example : Given: A = \$5,000, N = 5 years, and i = 6% Find: F Solution: F = \$5,000( F/A ,6%,5) = \$28,185.46 0 1 2 3 N F A
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