Lec%2011_Full - IE 343 Engineering Economics Lecture 11:...

Info iconThis preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
IE 343 Engineering Economics Lecture 11: Chapter 4 – The Time Value of Money Instructor: Tian Ni Sep. 16, 2011 IE 343 Fall 2011 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Homework 4 will be posted after today’s class Homework 4 is due Sep.23 Friday in class Midterm Exam 1 – Wednesday Sep. 28 in class Midterm Exam 1 review session – Monday Sep. 26 IE 343 Fall 2011 Announcement 2
Background image of page 2
Find F Given P: F = P(F/P, i%, N) Find P Given F: P = F(P/F, i% , N) Find F Given A: F = A(F/A, i% , N) Find A Given F: A = F(A/F, i% , N) Find P Given A: P = A(P/A, i% , N) Find A Given P: A = P(A/P, i% , N) Find F Given G: F = G(F/G, i% , N) Find P Given G: P = G(P/G, i% , N) Find A Given G: A = G(A/G, i% , N) IE 343 Fall 2011 Last Time … Interest Formulas 3 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Find F Given A: F = A(F/A, i% , N) Find A Given F: A = F(A/F, i% , N) IE 343 Fall 2011 Last Time … Annuities i i A F N 1 ) 1 ( + = + = 1 ) 1 ( N i i F A 4
Background image of page 4
Find P Given A: P = A(P/A, i% , N) Find A Given P: A = P(A/P, i% , N) IE 343 Fall 2011 Last Time … Annuities + + = N N i i i A P ) 1 ( 1 ) 1 ( + + = 1 ) 1 ( ) 1 ( N N i i i P A 5
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Annuities Interest Formulas Find A Given P A = P (A/P, i% , N) IE 343 Fall 2011 6
Background image of page 6
From P = A (P/A, i% , N) <=> Notation: A= P(A/P, i%, N). IE 343 Fall 2011 Find A Given P ], ) 1 ( 1 ) 1 ( [ N N i i i A P + + = + + = 1 ) 1 ( ) 1 ( N N i i i P A 7
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Question: You plan to borrow a loan of $100,000 which you will repay with equal annual payments for the next 5 years. Suppose the interest rate you are charged is 8% per year and you will make the first payment one year after receiving the loan. How much is your annual payment? IE 343 Fall 2011 Find A Given P - Example 4.13 8
Background image of page 8
Solution: P = 100, 000 , i = 8% per year, N = 5 years. A =? You can use the table (appendix C) from the back of the textbook: A = P(A/P , i% , N ) = 100,000 (A/P , 8% , 5 ) = 100,000(0.2505) = $25050 IE 343 Fall 2011 Example 4.13 – Solution 050 $25, ] 1 ) 08 . 1 ( ) 08 . 1 ( 08 . 0 [ 000 , 100 ] 1 ) 1 ( ) 1 ( [ 5 5 = = + + = N N i i i P A 9
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Back to Example 4.5 plan 3, i = 10%, N = 3 Plan 3: Pay off the debt in 3 equal end-of-year payments. Show calculations of A=4,021. IE 343 Fall 2011 Find A Given P - Example 4.14 10
Background image of page 10
P = 10, 000 , i = 10% per year, N = 3 years. A =? You can use the table (appendix C) from the back of the textbook: A = P(A/P , i% , N ) = 10,000 (A/P , 10% , 3 ) = 10,000(0.4021) = $4,021 IE 343 Fall 2011 Example 4.14 – Solution $4,021 ] 1 ) 1 . 1 ( ) 1 . 1 ( 1 . 0 [ 000
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/28/2012 for the course IE 343 taught by Professor Vincent,g during the Winter '08 term at Purdue University-West Lafayette.

Page1 / 47

Lec%2011_Full - IE 343 Engineering Economics Lecture 11:...

This preview shows document pages 1 - 12. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online