ENGINEERING ECONOMICS ret DOCX

Title	ENGINEERING ECONOMICS ret
Author	Aljohn Paul Escalona
Pages	11
File Size	77 KB
File Type	DOCX
Total Downloads	98
Total Views	164

Summary

ENGINEERING ECONOMICS Engineering Economy – study of the cost factors involved in engineering projects, and using the results of such study in employing the most efficient cost-saving techniques without affecting the safety and soundness of the project. INTEREST Interest – money paid for the use of ...

Description

(for exact simple interest) February: 28/29 July: 31 August: 31 September: 30 October: 31 November: 30 December:31 January: 31 February: 28/29 March: 31 April: 30 May: 31 June: 30 where: P = principal or present value I = interest F = future value i = interest rate per period (if not specific, consider per year) n = number of interest period where: i = rate of interest per interest period r = nominal rate of interest m = number of compounding periods per year ENGINEERING ECONOMICS Engineering Economy – study of the cost factors involved in engineering projects, and using the results of such study in employing the most efficient cost-saving techniques without affecting the safety and soundness of the project. INTEREST Interest – money paid for the use of borrowed money. Simple Interest – the interest paid on the principal only. In practice, simple interest is paid on SHORT-TERM loans in which the time of the loan is measured in days. Also known as nominal rate of interest. (a) Ordinary Simple Interest 1 month = 30 days 1 year = 360 days (b) Exact Simple Interest 365 days in ordinary year 366 days in leap year FORMULA: I = Pin F = P + I F = P(1 + in) Compound Interest – the interest earned by the principal is not paid at the end of each interest period, but is considered as added to the principal, and therefore will also earn interest for the succeeding periods. FORMULA: F = P(1 + i)n Rates of Interest: (a) Nominal Rate of Interest i= r m (b) Effective rate of Interest ie=(1+ r m ) m 1...