Scribd
Upload
8 views9 pages

Lecture No.8 Contemporary Engineering Economics

23

Uploaded by

Daniel Gnanaselvam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
8 views9 pages

Lecture No.8 Contemporary Engineering Economics

23

Uploaded by

Daniel Gnanaselvam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 9

Lecture No.

8
Chapter 3
Contemporary Engineering Economics
Copyright 2010

Contemporary Engineering Economics, 5th edition, 2010

Linear Gradient Series


A Strict Gradient Series

Gradient Series as a Composite Series of a


Uniform Series of N Payments of A1 and the
Gradient Series of Increments of Constant
Amount G.

Contemporary Engineering Economics, 5th edition, 2010

Example3.21 Linear Gradient: Find P, Given A1,


G, N, and i
Given: A1 = $1,000, G

= $250, N = 5 years,
and i = 12% per year
Find: P

Excel Solution:

Contemporary Engineering Economics, 5th edition, 2010

Gradient-to-Equal-Payment Series
Conversion Factor, (A/G, i, N)
Cash Flow Series
Given: G = $1,000,

N = 10 years, i =
12%
Find: A
Solution:

Factor Notation

Contemporary Engineering Economics, 5th edition, 2010

Example 3.22 Linear Gradient: Find A, Given A1,


G, i, and N
Given: A1 = $1,000, G

= $300, N = 6 years,
and i = 10% per year
Find: A

Contemporary Engineering Economics, 5th edition, 2010

Example 3.23 Declining Linear


Gradient Series
Given: A1 = $1,200,

G = -$200, N = 5
years, and i = 10% per
year
Find: F
Strategy: Since we
have no interest formula
to compute the future
worth of a linear
gradient series directly,
we first find the
equivalent present worth
of the gradient series
and then convert this P
to its equivalent F.

Contemporary Engineering Economics, 5th edition, 2010

Present Worth of Geometric


Gradient Series
Formula:

Factor Notation:

Contemporary Engineering Economics, 5th edition, 2010

Example 3.24 Geometric Gradient Series


Given: A1 = $54,600,

g = 7%, N = 5 years,
and i = 12% per year
Find: P

Contemporary Engineering Economics, 5th edition, 2010

Example 3.25 Retirement Plan Saving $1


Million
Given: F =
$1,000,000, g = 6%,
i = 8%, and N = 20

Find: A1
Solution:

Contemporary Engineering Economics, 5th edition, 2010

You might also like