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,"'\ INTEREST FORMULAS INVOLVING THE GRADIENT SERIES:
'lo Find Given Eguation/Factor Eggmgl§_ﬂgmg
F G ‘ E = l §1+i1N - 1 — N] Future worth of a
' G i ‘ i ‘gradient series
= (F/G.i.N)
Av G A = l - N Uniform series worth
, G 1 (1+i)“ _ 1 of a gradient se
. Example: 0°G.
Assume that the cost for operating a new machine is expected to be
$25000 in the first year. It is also anticipated that the costs w1ll
decline by $2500 in each of the following 5 years due to the’operator
“learning curve".
If the manager