Figure 4 1 The nominal interest rate is

Table 4. 1 Interest Calculation with Quarterly Compounding Contemporary Engineering Economics, 6 e, GE

Table 4. 2 Nominal and Effective Interest Rates with Different Compounding Periods Contemporary Engineering

Figure 4. 2 Functional relationships among r, i, and ia, where interest is calculated

Figure 4. 3 A car loan cash transaction (Example 4. 4). Contemporary Engineering Economics,

Figure 4. 4 Quarterly deposits with monthly compounding (Example 4. 5). Contemporary Engineering Economics,

Figure 4. 5 An Excel worksheet to illustrate the process of accumulating the future

Figure 4. 6 A present-worth calculation for an equal payment series with an interest

Figure 4. 7). Calculation of equivalent monthly interest when the quarterly interest rate is

Figure 4. 8 Cash flow diagram (Example 4. 7). Contemporary Engineering Economics, 6 e,

Figure 4. 9 Transformed cash flow diagram created by summing monthly cash flows to

Figure 4. 10 period. A decision flowchart demonstrating how to compute the effective interest

Table 4. 3 Summary of Selected Continuous Compounding Formulas with Discrete Payments Contemporary Engineering

Figure 4. 11 of r%. Finding an equivalent present worth of a continuous-flow payment

Table 4. 4 Summary of Interest Factors for Typical Continuous Cash Flows with Continuous

Table 4. 4 (continued) Summary of Interest Factors for Typical Continuous Cash Flows with

Figure 4. 12 Comparison between daily transaction and continuous-funds flow transaction (Example 4. 10).

Figure 4. 13 Finding the present worth of a ramp cash flow function (Example

Figure 4. 14 Future worth calculation with changing interest rates (Example 4. 12). Contemporary

Figure 4. 15 Equivalence calculation with changing interest rates (Example 4. 13). Contemporary Engineering

Figure 4. 16 Cash flow diagram of the home improvement loan with an APR

Figure 4. 17 The proportions of principal and interest payments over the life of

Table 4. 5 Creating a Loan Repayment Schedule with Excel (Example 4. 14) continued

Table 4. 5 (continued) Creating a Loan Repayment Schedule with Excel (Example 4. 14)

Figure 4. 18 Calculating the remaining loan balance on the basis of Method 2.

Figure 4. 19 Computing the outstanding loan balance after making the sixth payment on

Table 4. 6 Summary of Automobile Financing Options Contemporary Engineering Economics, 6 e, GE

Figure 4. 20 Comparing different financing options (Example 4. 17). Contemporary Engineering Economics, 6

Figure 4. 21 Comparison of interest payments between option 1 and option 2. Contemporary

Figure 4. 22 Selected index rates for ARMs over a 15 -year period. Contemporary

Table 4. 7 Monthly Payments Under 5/1 Hybrid Mortgage Contemporary Engineering Economics, 6 e,

Figure 4. 23 Types of bonds and how they are issued in the financial

Table 4. 8 Types of Bond Rating According to Financial Risk Contemporary Engineering Economics,

Figure 4. 24 bond. A typical cash flow transaction associated with an investment in

Table 4. 9 An Excel Worksheet to find the yield to maturity of the

Figure P 4. 40 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Figure P 4. 56 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Figure P 4. 57 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Figure P 4. 58 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Table P 4. 60 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Table ST 4. 1 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

Table ST 4. 5 Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright

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Figure 4. 1 The nominal interest rate is determined by summing the individual interest rates period. Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 2 Nominal and Effective Interest Rates with Different Compounding Periods Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 2 Functional relationships among r, i, and ia, where interest is calculated based on 9% compounded monthly and payments occur quarterly (Example 4. 2). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 5 An Excel worksheet to illustrate the process of accumulating the future worth. Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 6 A present-worth calculation for an equal payment series with an interest rate of 8% compounded continuously (Example 4. 6). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 7). Calculation of equivalent monthly interest when the quarterly interest rate is specified (Example Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 9 Transformed cash flow diagram created by summing monthly cash flows to the end of the quarterly compounding period (Example 4. 8). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 10 period. A decision flowchart demonstrating how to compute the effective interest rate i per payment Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 3 Summary of Selected Continuous Compounding Formulas with Discrete Payments Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 11 of r%. Finding an equivalent present worth of a continuous-flow payment function f (t) at a nominal rate Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 4 Summary of Interest Factors for Typical Continuous Cash Flows with Continuous Compounding continued on next slide Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 4 (continued) Summary of Interest Factors for Typical Continuous Cash Flows with Continuous Compounding continued on next slide Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 4 (continued) Summary of Interest Factors for Typical Continuous Cash Flows with Continuous Compounding Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 12 Comparison between daily transaction and continuous-funds flow transaction (Example 4. 10). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 13 Finding the present worth of a ramp cash flow function (Example 4. 11). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 14 Future worth calculation with changing interest rates (Example 4. 12). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 15 Equivalence calculation with changing interest rates (Example 4. 13). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 16 Cash flow diagram of the home improvement loan with an APR of 12% (Example 4. 14). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 17 The proportions of principal and interest payments over the life of the loan (monthly payment = $235. 37) (Example 4. 14). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 5 Creating a Loan Repayment Schedule with Excel (Example 4. 14) continued on next slide Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 5 (continued) Creating a Loan Repayment Schedule with Excel (Example 4. 14) Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 19 Computing the outstanding loan balance after making the sixth payment on the home improvement loan (Example 4. 15). Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 23 Types of bonds and how they are issued in the financial market. Source: Virginia B. Morris and Kenneth M. Morris, The Wall Street Guide to Understanding Money and Investing, © 2014 by Lightbulb Press, Inc. Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Figure 4. 24 bond. A typical cash flow transaction associated with an investment in Coca-Cola Enterprises’ corporate Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved

Table 4. 9 An Excel Worksheet to find the yield to maturity of the Coca-Cola Enterprises bond Contemporary Engineering Economics, 6 e, GE Chan S. Park Copyright © 2016, Pearson Education, Ltd. All Rights Reserved