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Engineering Economy, 5/e
Leland Blank, Texas A&M University
Anthony Tarquin, University of Texas - El Paso
Factors: How Time and Interest Affect Money

Learning Objectives

Purpose: Derive and use the engineering economy factors to account for the time value of money.

This chapter will help you:


1. F/P and P/F factors

Derive and use the compound amount factor and present worth factor for single payments.

2. P/A and A/P factors

Derive and use the uniform series present worth and capital recovery factors.

3. F/A and A/F factors

Derive and use the uniform series compound amount and sinking fund factors.

4. Interpolate factor values

Linearly interpolate to determine a factor value.

5. P/G and A/G factors

Derive and use the arithmetic gradient present worth and uniform series factors.

6. Geometric gradient

Derive and use the geometric gradient series formulas.

7. Calculate i

Determine the interest rate (rate of return) for a sequence of cash flows.

8. Calculate n

Determine the number of years required for equivalence in a cash flow series.

9. Spreadsheets

Develop a spreadsheet to perform basic sensitivity analysis using spreadsheet functions.








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