Engineering Economic Analysis

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Present worth

Problems 129

_

[

er- 1

]

_ _

P=F - =F[P/F,r,n]

rern

Nominal Interest Rate per Year,r

The annual interest rate without considering the effect of any compoun<:fu.1g.

Effective Interest Rate per Year,ia

The annualinterestrate takingintoaccountthe effectof anycompoundingduringtheyear.

Effectiveinterestrate per year (periodiccompounding):

or

Effective interest rate per year (continuous compounding):

Problems

4-1 Solve diagrams (a)-(c) for the unknowns R,S, and
T,assuming a 10% interest rate.

R s

(a) (b)

120

90 t

3. Y t I

0-1-2-3-4-5

~ ~ ~ ~ ~

T T T T T

(c)

(Answers: R=$464.10; S=$218.90;T=$54.30)

ia. er - 1

4-2 For diagrams (a)-(d), compute the unknown values:

B,C,V, x, respectively, using the minimum number

of compound interest factors.

100 100 100

f f f

0-1-2-3-4-5

!

i=10%

n=5

200 200 200 200

r r r r

0-1-2-3-4

1

i=10%

B c

(a) (b)

4x

r r

2x

10 10 10 10 x

t t t t + t

0-1-2-3-4-5 0-1-2-3-4

i=1O%

!

I i=1O%

t x=?

V 500

(c) (d)

,