Find the equivalent present worth, annual worth, and future worth of the cash flow diagram.
Answer to Problem 18P
The equivalent present worth, annual worth, and future worth of the cash flow diagram is
Explanation of Solution
Given data:
The normal interest rate
Formula used:
Formula to calculate the present worth for the given cash flow diagram is,
Here,
Refer the Problem 20.18 Figure in the textbook, the equation (1) is rewritten with respect to the given number of years is,
Formula to calculate the present cost for the given uniform series payment is,
Formula to calculate the present cost for the given future value is,
Formula to calculate the annual worth for the given cash flow diagram is,
Here,
Refer the Problem 20.18 figure, the equation (5) is rewritten with respect to the given number of years is,
Formula to calculate the uniform series payment for the given present cost is,
Formula to calculate the future worth for the given cash flow diagram is,
Refer the Problem 20.18 figure, the equation (8) is rewritten with respect to the given number of years is,
Formula to calculate the future cost for the given present cost is,
Calculation:
Case (i): Equivalent present worth.
Substitute
Substitute
Substitute
Substitute
Substitute
Substitute
Case (ii): Equivalent annual worth.
Substitute
Substitute
Case (iii): Equivalent future worth.
Substitute
Substitute
Therefore, the equivalent present worth, annual worth, and future worth of the cash flow diagram is
Conclusion:
Thus, the equivalent present worth, annual worth, and future worth of the cash flow diagram is
Want to see more full solutions like this?
Chapter 20 Solutions
EBK ENGINEERING FUNDAMENTALS: AN INTROD
- Using Excel or a spreadsheet of your choice, create interest–time factor tables, similar to Table 20.9 , for i = 8 5% and i = 9 5%.arrow_forwardhat is the equivalent present value of the following series of payments if the interest rate is 10% compounded annually? P7,000 for 1styear, P6,500 for 2ndyear, P6000 for 3rdyear, P5,500 for 4thyear, and P5,000 5thyear. please also draw a cash flow diagram and dont use the table methodarrow_forward
- Engineering Fundamentals: An Introduction to Engi...Civil EngineeringISBN:9781305084766Author:Saeed MoaveniPublisher:Cengage Learning