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Economics Annuity

This document discusses solving engineering economics problems involving annuities using calculator techniques. It defines annuity as a series of uniform payments made at equal time intervals. The key elements of an annuity are presented as payment (A), present worth (P), future worth (F), interest rate (i), and number of periods (n). Formulas for present worth and future worth are shown. An example calculates the monthly payment on a 100,000 peso land purchase with 12% interest over 20 years. A second example finds the accumulated amount of a 6,000 peso annual payment over 5 years at 15% interest.

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2K views2 pages

Economics Annuity

This document discusses solving engineering economics problems involving annuities using calculator techniques. It defines annuity as a series of uniform payments made at equal time intervals. The key elements of an annuity are presented as payment (A), present worth (P), future worth (F), interest rate (i), and number of periods (n). Formulas for present worth and future worth are shown. An example calculates the monthly payment on a 100,000 peso land purchase with 12% interest over 20 years. A second example finds the accumulated amount of a 6,000 peso annual payment over 5 years at 15% interest.

Uploaded by

Geodetic Engineering Files
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SOLVING ENGINEERING ECONOMICS PROBLEMS[ANNUITY]

WITH CALCULATOR TECHNIQUES


N. Tabanao
Email:heartfiglia143@gmail.com
May 2018

Calculators Used:
Casio Fx-115 ES PLUS
Casio Fx-570 ES PLUS
Casio Fx-991 ES PLUS

Annuity
Annuity is a series of uniform payments made at equal intervals of
time.

Elements of annuity
A= payment [periodic]
P= present worth of all periodic payments
F= future worth of all periodic payments
i= rate
n= number of interest periods

SYMBOL BOOK FORMULA Calculator Trick


P=A(P/A,i,n) [1  1  i  ]  ---1.1
n n
P  A 1  i 
x
PA
i 1

F=A(F/A,i,n) [1  i   1]  
n n 1
F  A 1  i  ---1.2
x
FA
i 0

Disclaimer: Problems presented taken from the internet.

Example 1
A man purchased on monthly installment a PhP 100,000 worth of
land. The interest rate is 12% nominal and payable in 20 years. What
is the monthly amortization?

12%
i ; n=12(20); P=PhP 100,00
12

FROM 1.1
 
n
P  A 1  i 
x

1
P 100000
A  = PhP 1101.09
 1  i   
n
x 12 ( 20 )   12%   x 
 1   
1  12  
1 

Example 2
What is the accumulated amount of five year annuity paying PhP
6,000 at the end of each year? Interest at 15% compounded annually.

i=15%; n=5; A=PhP 6K

FROM 1.2
 
n 1
F  A 1  i 
x

 
5 1
F  6000 1  15%  = PhP 40,454.29
x

I will appreciate any suggestion and will welcome any errors


pointed out.

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