ADNAN MENDERES UNIVERSITY

FACULTY OF ENGINEERING

MECHANICAL ENGINEERING DEPARTMENT

ME 313 – ENGINEERING
ECONOMY
Instructor: Asst. Prof. Dr. Sinan GÜÇLÜER
sgucluer@adu.edu.tr
4.8 Summary of Interest Formulas and
Relationships for Discrete Compounding
Table 4-3 provides a summary of the six most common
discrete compound interest factors, utilizing notation of the
preceding sections. The formulas are for discrete
compounding, which means that the interest is compounded
at the end of each finitelength period, such as a month or a
year. Furthermore, the formulas also assume discrete (i.e.,
lump sum) cash flows spaced at the end of equal time
intervals on a cash-flow diagram. Discrete compound interest
factors are given in Appendix C, where the assumption is
made that i remains constant during the N compounding
periods.
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