Examples with Geometric Gradient, Complex Cash Flows几何梯度的例子，复杂的现金流.pptVIP

ENGR 390: Engineering Economics * Concepts from the example problems ( F / P, i, N) ? Problem 1 ( P / F, i, N) ? Problem 2 ( F / A, i, N) ? Problem 3 ( A / F, i, N) ? Problem 4 ( P / A, i, N) ? Problem 5 ( A / P, i, N) ? Problem 6 ( P / G, i, N) ? Problem 7 ( A / G, i, N) ? Problem 8 * Example 1 How much would you have to deposit today to have $2000 in 4 years if you can get a 12% interest rate compounded annually? GIVEN: F4 = $2 000 i = 12% FIND P: P = F4(P/F,i,n) = 2 000(P|F,12%,4) = 2 000(0.6355) = $1 271 0 1 2 3 n=4 P? $2 000 DIAGRAM: * Different Ways of Looking at P/F From previous example, if you can earn 12% compounded annually, you need to deposit $1271 to have $2000 in 4 years. You are indifferent between $1271 today and $2000 in 4 years, assuming you can earn a return on your money of 12%. The present worth of $2000 in 4 years is $1271 (i = 12% cpd ? annually). ? my abbreviation for compounded If you could get 13% on your money, would you rather have the $1271 today, or $2000 in 4 years ? * Example 2 Tuition costs are expected to inflate at the rate of 8% per year. The first year’s tuition is due one year from now and will be $10,000. To cover tuition cost for 4 years, a fund is to be set up today in an account that will earn interest at the rate of 5% per year, compounded annually. How much must be deposited into the fund today in order to pay the 4 years of tuition expenses? * Present Given Gradient (Geometric) g is the geometric gradient over the time period (time period: Time 0 to Time n, 1st flow at Time 1) P is the present value of the flow at Time 0 (n periods in the past) i is the effective interest rate for each period Note: cash flow starts with A1 at Time 1, increases by constant g% per period 0 n A1 P ? 1 2 3 P = A1(P/A,g,i,n) g = % * Example 2 Tuition costs are expected to inflate at the rate of 8% per year. The first year’s tuition is due one year from now and will be $10,000. To cov