Engineering Fundamentals: An Introduction to Engineering, 4th ed.c

676

Formula

F



P(1



i)

n

F



P(1



i/m)

nm

F

Future value(Future worth)

i

Interest per year (%)

m

Interest compoundingfrequency

n

Period (years)

P

Present value (Presentworth)

ieff

Effective interestrate per year (%)

i

Normal interestper year (%)

m

Interest compoundingfrequency

P

Present value(Present worth)

i

Interest per year (%)

n

Period (years)

F

Future value(Future worth)

EquationNumber

(20.2)(20.3) (20.4) (20.5)

Excel Financial Function



FV(Rate, Nper, Pmt, Pv, Type)FV

Future value(Future worth)

Rate

Interest rate per period

Nper Total number of

payment periods inan annuity

Pmt

Payment made eachperiod

Pv

Present value(Present worth)

Type Number 0 or 1 and indicates

when payments are due.If type is omitted, it isassumed to be 0.(0: at the end of the period, 1:at the beginingof the period)

Investment or payment is described asnegative number and income isdescribed as positive number. 

EFFECT(Nominal interestper year, Npery)Npery Number of compounding

periods per year



PV(Rate, Nper, Pmt, Fv, Type)PV

Present value (Present worth)

Rate

Interest rate per period

Nper Total number of payment

periods in an annuity

Pmt

Payment made each period

Fv

Future value (Future worth)

Type Number 0 or 1 and indicates

when payments are due.If type is omitted, it is assumedto be 0.

Example /

Section

Example 20.3Example 20.4 Example 20.6aExample 20.6c

Section 20.5

How to Use Excel to Solve the Example Problem



FV(0.07,8,,



1500. 
      



2,577.28



FV(0.07/12,8*12,,



1500. 
      



2,621.74



EFFECT(0.07,12)



7.23%



EFFECT(0.06,2)



6.09%



PV(0.065,5,,2000)



1,459.76

TABLE 20.11

Example of Excel’s Financial Functions and How They May be Used

Continued

ieff



a

1



i m

b

m



1

P



F

11



i^2

n

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