# quiz2EngineeringEcon

 Simple Interest Formula I = (P) (N)(i) Simple Interest Definition Interest is linearly proportional to the principal, interest rate & number of interest periods (P/A) Principal Annualized (P/F) Principal Future (A/F) Annual Future (A/P) Annual Present Find F given P F=P(F/P, i%, N) Find P given F P=F(P/F, i%, N) Find i given P, F, N I = N sqrt F/P-1 Present Worth Equivalent worth of all cash flows relative to the time called "present" Future Worth (FW) Equivalent worth of all cash inflows and outflows at the end of the planning horizon at an interest rate that is generally the MARR Annual Worth (AW) An equal annual series of dollar amounts for a stated study period, that is equivalent to the cash inflows and outflows at an interest rate that is generally MARR Internal Rate of Return Method (IRR) Solves for the interest rate that equates the equivalent worth of an alternative's cash inflows to the equivalent worth of cash outflows. Single Payment Present Worth P = F(P/F, i%, N) Something will be worth F in the future, what should you pay for it now? MARR Minimum Attractive Rate of Return Critical Path Method A family of analysis techniques aimed at scheduling activites on a project Capital Money or property Interest & profits Pay providers of capital Economic Equivalence Allows us to compare alternatives on a common basis Single payment uniform series (F/A) F = A(F/A, i%, N) External Rate of Return (ERR) Takes into account the interest rate external to a project at which net cash flows generated (or borrowed) by the project over its life can be reinvested (or borrowed) AuthorAnonymous ID87635 Card Setquiz2EngineeringEcon DescriptionEngineering Economy terms for quiz2 Updated2011-05-25T04:03:22Z Show Answers