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
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Chapter 20 Solutions
ENGINEERING FUNDAMENTALS
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