TABLE OF CONTENTS The following equations and terms are used in this Chapter to solve compound interest problems and problems in engineering economy. These interest formulas are from Principles of Engineering Economy 1 by Eugent L. Grant and W. Grant Ireson.
Definition of terms used:
P = present sum of money at time zero
n = number of interest periods
i = interest rate
S = sum of money at the end of n interest periods
R = end-of-period payments in a uniform series extending for n periods
A summary of the interest equations used in this chapter is given in Table 6.1.
| Given | Find | Interest Factor Used | Abbreviation | Abbreviated Equation | Interest Formula |
|---|---|---|---|---|---|
| P | S | Single Payment Compound Amount | caf ? | S = P (caf ?) | S = P (l + i) n |
| S | P | Single Payment Present Worth | pwf ? | P = S (pwf ?) | |
| S | R | Sinking Fund Factor | sff | R = S (sff) | |
| P | R | Capital Recovery Factor | crf | R = P (crf) | |
| R | S | Uniform Series Compound Amount | caf | S = R (caf) | |
| R | P | Uniform Series Present Worth | pwf | P = R (pwf) | |
The following discussion of several of the more common cost indexes is included as an introduction to this chapter. Cost indexes are useful to adjust costs for inflation and to make general or preliminary cost estimates. A special reprint of the Engineering New-Record Building Cost, Construction Cost, and Labor indexes by geographical location is included in the...
