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ENGINEERING ECONOMY Fifth Edition Mc


Blank and Tarquin Graw
Hill

Chapter IV

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S  Series Analysis ź PP >= CP

 
     
  
 
  
  
 

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Example

For the past 7 years, a manager


has paid $500 every  months for
the software maintenance contract
of a LAN What is the equivalent
amount after the last payment, if
these funds are taken from a pool
that has been returning 20 % per
year, compounded quarterly

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S  Series Example /- *00



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ENGINEERING ECONOMY Fifth Edition Mc


Blank and Tarquin Graw
Hill

Chapter IV

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S 7 Single Amounts/Series with PP < CP

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S 7 Interperiod Compounding Issues

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S 7 Final Results: No interperiod Comp

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Inter-Period Compounding (For PP < CP)

The CFs are not moved and eq


P, F, & A values are
determined, using eff Interest
rate per PP
Economic relations are
determined in the same way as
in PP á CP case
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Inter-Period Compounding (For PP < CP)

m < 1 in this case


eg :
PP weekly & CP Quarterly then
m = 1/13 of a quarter
For r = 12%/year, c q = 3% per quarter, c q
Effective weekly i% = (1 03)1/13 ź 1
= 0 228% per week

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