Engineering Economics, Excel Cost of Loosing One Semester

Some Excel Financial Functions  Type = 0 or not entered E

Present Value Example  Cost today of a loan for five terms where you are paying 250 at the end of each period  The formula was preceded with a minus to compensate for the negative sign of excel

Present Value Example  Cost today of a loan for five terms where you are paying 250 at the beginning of each period  The formula was preceded with a minus to compensate for the negative sign of excel

Some Excel Financial Functions

Future Value Example  Cost at the end of a loan for five terms where you are paying 250 at the end of each period  The formula was preceded with a minus to compensate for the negative sign of excel

Some Excel Financial Functions

Payment  Payment of a loan for five terms where the present value is  The formula was preceded with a minus to compensate for the negative sign of excel

Try this old example with excel  A new widget twister, with a life of six years, would save $2,000 in production costs each year. Using a 12% interest rate, determine the highest price that could be justified for the machine. Although the savings occur continuously throughout each year, follow the usual practice of lumping all amounts at the ends of years.

Try this old example with excel  Find the value in 2002 of a bond described as “Acme 8% of 2015” if the rate of return set by the market for similar bonds is 10%.

 Two students, Frank and Mary start they Engineering Studies on the same date and they make the commitment of retiring thirty years after their forecasted graduation date (the date they would graduate if no delays are introduced). This date will not change if any delays make any of them graduate later.  Calculate the difference in their earnings if for some reasons Frank is required to graduate one semester later than what was intended.

The Model  Assumptions:  We have a constant inflation  You have a yearly Salary Increase greater than what you loose because of inflation  Salary increases and inflation are constant  They work for the same company their entire carrier

One year window

Three year window

Thirty year window