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Engineering Economics Formula Sheet

This document contains engineering economics formulas for calculating simple interest, compound interest, continuously compounded interest, nominal rates, effective rates, and effective annual interest rates. It defines variables like principal (P), future amount (F), interest rate (i), number of periods (n), and number of periods per year (m). Formulas are provided for future worth, present worth, and converting between nominal and effective rates of interest under simple, compound, and continuous compounding.

Uploaded by

Arianne Joy
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
123 views

Engineering Economics Formula Sheet

This document contains engineering economics formulas for calculating simple interest, compound interest, continuously compounded interest, nominal rates, effective rates, and effective annual interest rates. It defines variables like principal (P), future amount (F), interest rate (i), number of periods (n), and number of periods per year (m). Formulas are provided for future worth, present worth, and converting between nominal and effective rates of interest under simple, compound, and continuous compounding.

Uploaded by

Arianne Joy
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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ENGINEERING ECONOMICS FORMULA SHEET

WHERE:

𝐼 − 𝑠𝑖𝑚𝑝𝑙𝑒 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑃 − 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙 𝐹 − 𝐹𝑢𝑡𝑢𝑟𝑒 𝑎𝑚𝑜𝑢𝑛𝑡


𝑖 − 𝑟𝑎𝑡𝑒 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑒𝑟 𝑝𝑒𝑟𝑖𝑜𝑑 𝑛 − 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑒𝑟𝑖𝑜𝑑
𝑒 𝑟𝑛 − 𝑐𝑜𝑛𝑡𝑖𝑛𝑢𝑜𝑢𝑠 𝑐𝑜𝑚𝑝𝑜𝑢𝑛𝑑𝑖𝑛𝑔 𝑎𝑚𝑜𝑢𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟 1
− 𝑝𝑟𝑒𝑠𝑒𝑛𝑡 𝑤𝑜𝑟𝑡ℎ 𝑓𝑎𝑐𝑡𝑜𝑟
𝑒 𝑟𝑛
𝑚 − 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑒𝑟𝑖𝑜𝑑 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟

SIMPLE INTEREST
𝐹 = 𝑃+𝐼 𝐹 = 𝑃(1 + 𝑛𝑖) 𝐹 = 𝑃(1 + 𝑖)𝑛 𝑑
𝑖=
𝑖𝑓 𝐼 = 𝑃𝑛𝑖 1−𝑑
𝑑 = 𝑖(1 − 𝑑)
COMPOUND INTEREST
𝑖 𝑛𝑚 𝐹
𝐹 = 𝑃 (1 + ) 𝑃=
𝑛 (1 + 𝑖)𝑛
COMPOUND CONTINUOUSLY
FUTURE WORTH PRESENT WORTH
𝐹 = 𝑃𝑒 𝑟𝑛 𝐹
𝑃=
𝑒 𝑟𝑛
NOMINAL RATE
𝑟
𝑖=
𝑚
EFFECTIVE RATE
𝐹 = 𝑃(1 + 𝑖)𝑛
EFFECTIVE RATE OF INTEREST
𝑖𝑛𝑟 𝑚
𝑖𝑒𝑓𝑓 = (1 + ) − 1
𝑚
EFFECTIVE ANNUAL INTEREST RATE
𝑖𝑒 = 𝑒 𝑟 − 1
SAMPLES

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