ENGG ECON

Question 1

$Simple\ Interest\ $ $(I)$

Accepted Answer

$I\ =\ P\ i\ n$

Question 2

$Simple\ Interest\ $ $Future\ Worth\ (F)$

Accepted Answer

$F\ =\ P\ \left(1+\ in\right)$

Question 3

$Compound\ Interest$ $Future\ Worth\ (F)$

Accepted Answer

$F\ =\ P\ {\left(1+\ i\right)\ }^n$

Question 4

$Interest\ Rate$ $(i)$

Accepted Answer

$i\ =\ \frac{F\ -\ P}{P}$

Question 5

$Discount\ Rate$ $(d)$

Accepted Answer

$d\ =\ \frac{F\ -\ P}{F}$ $d\ =\ \frac{i}{1+i}\ \ $

Question 6

$Compound\ Interest\ $ $Future\ Worth\ (F)$ (A.K.A Lump Sum)

Accepted Answer

$F\ =\ P\ \left(1+\ \frac{r}{m}\right)^{m\ t}\ \ $

Question 7

TRANSFER of VALUE in CASH-FLOW DIAGRAM

Accepted Answer

$ F\ =\ \ Value\ \left(1+\ \frac{r}{m}\ \right)^{\left(to\right)\ -\ \left(from\right)}$

Question 8

DEFERRED ANNUITY

Accepted Answer

delayed payment

Question 9

ANNUITY DUE $$ best USE a FORMULA

Accepted Answer

$P\ =\ \frac{A\ \left[\left(1+\ \frac{r}{m}\right)^{m\ t}\ -1\right]}{\frac{r}{m}\ \left(1+\ \frac{r}{m}\right)^{m\ t}}$
$F\ =\ \frac{A\ \left[\left(1+\ \frac{r}{m}\right)^{m\ t}\ -1\right]}{\frac{r}{m}}\ $
n= number of payments

Question 10

$Effective\ Rate$ $ (i_e)\ $

Accepted Answer

$i_e=\ \left(1+\frac{r}{m}\right)^m-1$

Question 11

$Compounded\ Continously\ $ $Future\ Worth\ (F)$

Accepted Answer

$F\ =\ P\ {e\ }^{r\ n}\ \ $

Question 12

CALTECH CONCEPT $$ PRESENT WORTH ANNUITY not in reference 0

Accepted Answer

(e.g. must be "n-2")

Question 13

ORDINARY ANNUITY

Accepted Answer

FUTURE WORTH is ALWAYS at the LAST PAYMENT PRESENT WORTH is ALWAYS BEFORE the FIRST PAYMENT

Question 14

if the word CONTINUOUSLY is INDICATED, the base formula can be altered by

Accepted Answer

$\left(1+\ i\right)\ =\ \ \ e^{r\ }$ also the same as EFFECTIVE RATE $ER\ =\ e^r-1$

Question 15

$Annuity$ $Future\ Worth\ (F)$

Accepted Answer

$F\ =\ \frac{A\ \left[\left(1+\ \frac{r}{m}\right)^{m\ t}\ -1\right]}{\frac{r}{m}}$ $ F\ =\ A\bullet\sum_{start}^{end}\left(\left(1+\frac{r}{m}\right)^{x-1}\right)$

Question 16

$Annuity\ $ $ Present\ Worth\ (P) $

Accepted Answer

$P\ =\ \frac{A\ \left[\left(1+\ \frac{r}{m}\right)^{m\ t}\ -1\right]}{\frac{r}{m}\ \left(1+\ \frac{r}{m}\right)^{m\ t}}$ $P\ =\ A\bullet\sum_{start}^{end}\left(\left(1+\frac{r}{m}\right)^{-x}\right)$

Question 17

$Annuity\ $ COMPOUNDED CONTINUOUSLY $Future\ Worth\ (F) $

Accepted Answer

$\left(1+\ i\right)\ =\ e^r$ $F\ =\ \frac{A\ \left[\left(1+\ i\right)^n\ -1\right]}{i}$ $F\ =\ \frac{A\ \left[\ {e\ }^{r\ n}-1\right]}{e^{\ r\ }-1}$

Question 18

$Arithmetic\ Gradient$ CALTECH

Accepted Answer

$MODE\ 3-2\ \ \left(y=A+Bx\right)\ \ Linear$ $P\ =\ \sum_{start}^{end}\left(\left(A+Bx\right)\left(1+\frac{r}{m}\right)^{-x}\right)$

Question 19

$Geometric\ Gradient$ CALTECH

Accepted Answer

$MODE\ 3-6\ \ \ \ \left(y=\ A\ B^x\right)\ \ \ Exponential$ $P\ =\ \sum_{start}^{end}\left(\left(A\ B^x\right)\left(1+\frac{r}{m}\right)^{-x}\right)$

Question 20

$Perpetuity$ $(P)$

Accepted Answer

$P\ =\ \frac{A}{i}$

Question 21

$Capitalized\ Cost$ $(CC)$

Accepted Answer

$CC=\ FC\ +\ \frac{OC}{i}+\ \frac{FC\ -\ SV}{\left(1+i\right)^n-1}$ n= interval of that cost (e.g. every 5 yrs; n=5)

Question 22

$Annual\ Cost$ $ (AC) $

Accepted Answer

$AC=\ CC\ \bullet\ i $

Question 23

$Depreciation$ $Book\ Value\ (BV)$

Accepted Answer

$BV_m=\ FC\ -\ D_m$

Question 24

$Declining\ Balance\ Method$ $Matheson\ Method$ $Constant\ Percentage\ Depreciation$ CALTECH

Accepted Answer

$SV\ =\ FC\ \left(1-\ k\right)^n$ $BV_m\ =\ FC\ \left(1-\ k\right)^m$

Question 25

$Double\ Declining\ Balance\ Method$ $(Book\ Value\ at\ Certain\ Year)$ ${BV}_m$

Accepted Answer

${BV}_m=\ FC\ \left(1-\ \frac{2}{n}\right)^m\le\ SV$

Question 26

$Double\ Declining\ Balance\ Method$ $(Book\ Value\ at\ Certain\ Year)$ ${BV}_m$

Accepted Answer

${BV}_m=\ FC\ \left(1-\ \frac{2}{n}\right)^m\le\ SV$

Question 27

$Double\ Declining\ Balance\ Method$ Total Depreciation up to the Particular Year $(D_m)$

Accepted Answer

$D_m\ =\ FC\ -\ {BV}_m$

Question 28

$Double\ Declining\ Balance\ Method$ $(Depreciation\ \ in\ Particular\ Year)$ $(d_m)$

Accepted Answer

$d_m=\ {BV}_{\left(m-1\right)}-{BV}_m$

Question 29

$Sinking\ Fund\ Method$ $(Depreciation\ EVERY\ time\ (yr)\ given)$ $(d)$

Accepted Answer

$d\ =\ \frac{\left(FC-\ SV\right)\ i}{\left(1+i\right)^n-1}$

Question 30

$Sinking\ Fund\ Method$ $(Total\ Depreciation\ up\ $ $to\ Particular\ Year)$ $(D_m)$

Accepted Answer

$D_m\ =\ \frac{d\ \left(1+i\right)^m\ -1}{i}$

Question 31

$MACRS\ Method$ $ (First\ Year\ Depreciation) $

Accepted Answer

$\%\ d_1=\ \frac{1}{n} $ $\downdownarrows THEN\downdownarrows$ $ {\ d}_1\ =\ \%\ d_1\bullet\ FC$

Question 32

$MACRS\ Method$ $(Suceeding\ Year\ Depreciation)$

Accepted Answer

$\%\ d_m=\ \frac{2}{n}\ \left(1-\sum\left(\begin{matrix}all\ the\ prev.\depre.\ rate\\end{matrix}ight)ight)\ $ $\downdownarrows THEN\downdownarrows$ $ d_m\ =\ \%\ d_m\bullet\ FC$

Question 33

$MACRS\ Method$ $(Total\ Depreciation\ up\ to\ Particular\ Year)$ $(D_m)$

Accepted Answer

$D_m=\ FC\bullet\sum\left(\begin{matrix}all\ the\ prev.\depre.\ rate\\end{matrix}ight)$

Question 34

CASH PRICE = PRESENT WORTH

Accepted Answer

CASH PRICE = PRESENT WORTH

Question 35

BI- MONTHLY

Accepted Answer

payment every 2months BI- MONTHLY means m=6

Question 36

LEASE means ...

Accepted Answer

PAYMENT at the Beggining of each PERIOD

Question 37

INFLATION

Accepted Answer

$F_{price}\ =\ \ P_{price\ }\left(1+\ i\right)^n$

Question 38

inflation rate REAL INTEREST RATE

Accepted Answer

$i_f\ =\ i\ +\ f\ +\ if$

Question 39

Rate of Return

Accepted Answer

$Rate\ of\ Return\ (\%)= \dfrac{Annual\ Net\ Profit}{Total\ Capital}$

ENGG ECON

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