Engineering Economy

 Simple Interest  Compound interest Formula if

effective interest rate is given(ie)
F = P (1+rn)
I=F–P F = P¿
I = Prn  Cash Flow Diagram(Cash In= Cash Out)
Where:
P – Present worth of money
F – Future worth of money P= F
¿¿
n – Duration
r – Simple interest rate
I – Interest
 Equivalent Interest Rates(ie)

 Compound Interest ie = - 1
¿

F = P (1+ m¿ ¿
mn

 Ordinary Annuity
Where:
P – Present worth of money
F – Future worth of money
P= A {¿ ¿

n – Duration (in years)

in – nominal interest rate
m – Division value
F= A {¿ ¿

 For continuous compound interest

{ m=∞ }  Perpetuity

F = Pe ¿(n)

F= A
i
 Present worth factor of single
payment (P/F) Reciprocal of P/A
 Sinking Fund Factor (A/F)
P
F = 1
¿¿

Reciprocal of F/A
 Future worth factor of single
payment (F/P)  Total Depreciation after m(yrs.) Dm

F
P = ¿ Dm = FC – BVm
 Nth Depreciation (dm)
 Present worth factor of annual
payment (P/A) dm = B - BVmV −1

P
A = ¿¿

 Straight Line Method

 Future worth factor of annual
payment (F/A) MODE 3-2

F
A = ¿¿ X Y
O FC
 Capital Recovery Factor (A/P)
n SV
  Sinking Fund Method
 Sum of the Years Digit Method
MODE 3-3
F= A {¿ ¿

 Annual Depreciation (d)

X Y
O FC FC - SV = d {¿ ¿

n SV  Total Depreciation after m years, Dm

n+1 SV

 Declining Balance Method

Dm = d {¿ ¿

MODE 3-6
X Y
O FC  Value after m years( BVm)
n SV
BVm= FC-Dm
 Double Declining Method
MODE 3-6  Nth year depreciation (dm)
X Y
O FC dm= d (1+ i ¿¿
m−1

N FC (1-2)/2
 Capitalized Cost , K
 K= FC + OMC
i + FC¿−SV
¿
Where:
FC – First Cost
Cost = Sales
OMC – Operation and Maintenance Cost
SV – Salvage Value  Types of cost
i – Interest rate
e – Economic life 1. Fixed cost
2. Variable cost
 Annual Cost, A
A = Ki

 Bonds
Surveyi
P= D {¿ ¿
+ R
i¿ ¿
 Standard Deviation
S=√∑ ¿¿¿¿
Where:
P – Present Worth f – face/value
R – Redemption value r- bond rate  Standard Error
D- Divident
But:
E= ±
S
√n

D= Fr  Most Probable Error

Notes: Sometimes
P=R-F P = 0.6745
±
S
√n

 Break Even Analysis  Alternative ( using Calculator)

 Mode-3-1
 Stadia Surveying
 Horizontal Distance

H=L cosØ

 Vertical Distance  Correction due to temperature(C ) T

V=LsinØ CT
= LT

 Difference in elevation
DE= HI+V-m Where:

= LsinØ-m - coefficient of thermal expansion

L- measured length
T- change in temperature
 Slant Length T- actual /field temperature
To- standard temperature

L=kscosØ+c Note: 11.6 x 10 /℃ (for steel tape)

−6

Where:
k- stadia interval factor Ø- vertical angle
s- stadia intercept
= U-L
C- stadia constant  Correction due to pull (Cp)
m- middle reading
Cp
= ( P−Po ) L
AE

Where:
 P- actual pull
Po- standard pull
L- Measured Length
A- Cross section area of the tape
E- Modulus Elasticity

Note: E= 2.0 x 10 to 2.1 x 10 kg/cm

6 −6 2

h cr
= 0.067 K2

 Correction due to Sag( c) R=6400 km

Where:
Cs
= −w 2 L3
24 p2
h cr – in meters only
k - kilometers only
Where:
w- unit weight of tape(kg/m)
L- end to end distance of support
p- actual pull
 Simple Curves
 Reduction to sea level

L’= ) L¿

Where:
L’- sea level length
L- measured length
h- Elevation where the measurement is taken
R- Radius of the length

 Correction of vertical measurement

due to the combined effects of
curvature and refraction (h ) cr
  Degree of Curve ( Arc Basis )
R
= 1145.916
D

 Length of Curves  Degree of Curve ( Arc Basis )

10
Cp
= πRI
180
R
= D
sin( )
2

 Tangent and External Distance  Compound Curves

T= R tan
I
2

1
E= R ( I
cos( )
2
– 1)
 Chord Length and Middle Ordinate
Lch
= 2 R sin
I
2

M= R ( 1−cos
I
2 )
 Offset Distance and deflection angle
ip
= ∅
2
 Reversed Curves
  Considering the Spiral

 Spiral Curves

Where:
Yp- distance of P along tangent
Xp- offset distance
Øp- spiral < of P
ip- deflection angle

 Offset Distance
LS ∅ XC
z i p=
2 3 4