Interest Formulas Gradient Series Lecture No 8 Chapter

Linear Gradient Series A Strict Gradient Series Contemporary Engineering Economics, 6 th edition Park

Example 3. 18: Linear Gradient: Find P, Given A 1, G, N, and i

Solution q. Excel Solution Contemporary Engineering Economics, 6 th edition Park Copyright © 2016

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

Example 3. 19: Linear Gradient: Find A, Given A 1, G, i, and N

Solution Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education,

Example 3. 20: Declining Linear Gradient Series: Find F, Given A 1, G, I,

Solution q Strategy: Since we have no interest formula to compute the future worth

Present Worth of Geometric Gradient Series q Formula q Factor Notation Contemporary Engineering Economics,

Example 3. 21: Geometric Gradient Series q Given: A 1 = $54, 600, g

Example 3. 22: Retirement Plan: Saving $1 Million q Given: o F = $1,

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Interest Formulas (Gradient Series) Lecture No. 8 Chapter 3 Contemporary Engineering Economics Copyright © 2016 Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Linear Gradient Series A Strict Gradient Series Contemporary Engineering Economics, 6 th edition Park Gradient Series as a Composite Series of a Uniform Series of N Payments of A 1 and the Gradient Series of Increments of Constant Amount G Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Example 3. 18: Linear Gradient: Find P, Given A 1, G, N, and i q Given: A 1 = $1, 000, G = $250, N = 5 years, and i = 12% per year q Find: P Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Gradient-to-Equal-Payment Series Conversion Factor, (A/G, i, N) q Given: G = $1, 000, • Cash Flow Series N = 10 years, i = 12% q Find: A q. Solution • Factor Notation Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Example 3. 19: Linear Gradient: Find A, Given A 1, G, i, and N q Given: A 1 = $1, 000, G = $300, N = 6 years, and i = 10% per year q Find: A Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Example 3. 20: Declining Linear Gradient Series: Find F, Given A 1, G, I, and N q Given: A 1 = $1, 200, G = -$200, N = 5 years, and i = 10% per year q Find: F Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Solution q 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. q Solution Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Example 3. 21: Geometric Gradient Series q Given: A 1 = $54, 600, g = 7%, N = 5 years, and i = 12% per year q Find: P Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved

Example 3. 22: Retirement Plan: Saving $1 Million q Given: o F = $1, 000, o g = 6%, o i = 8%, and o N = 20 q Find: A 1 Contemporary Engineering Economics, 6 th edition Park Copyright © 2016 by Pearson Education, Inc. All Rights Reserved