Cost and Economic Analysis

Economic Analysis &
Life Cycle Costing

What is Economic Analysis?
• Economic analysis involves formulating, estimating and

evaluating the economic outcomes when choices of
equipment or systems are available to accomplish a specific
end or goal. The decision to select one of these choices must
be made based on data, analysis and comparison of the costs
and benefits of each choice. We call this selection process
“Economic Analysis”.
• Economic analysis forms the core methodology of making

decisions about whether or not a project is cost-effective, or
which one of several similar projects is most cost-effective.
These decisions require the knowledge of project costs and
project benefits (often called “cash flows”) as well as a
knowledge of interest rates and the time value of money.
30/01/2021 Energy Auditing and Energy Efficienc y

Engineering Economy
 Engineering economy is a collection of mathematical techniques, which simplify
economic comparison between different alternatives, or evaluate the implementation
of a new project
 An alternative is a stand-alone solution for a given task. There are always several
ways to accomplish this given task.
 This change in the value of money over a given time period is called the time value
of money. Some have called this the most important concept in economic analysis
 The manifestationof the TIME VALUE OF MONEY is termed INTEREST,

which is a measure of the increase between the original amount invested
or borrowed and the amount owed or accrued. Interest
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Slide 30/01/2021 Energy Auditing and Energy Efficienc y
Other Benefits of Economic Analysis
It can save us an enormous amount of time in the procurement process

because you’ll know what projects will stand up to the competition for
dollars.
It is very useful material for our professional and personal lives and can
assist us in getting the best deal when purchasing personal things such as
homes and cars.
Understanding how the value of money changes with time due to interest,
discounting, etc.
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Time Value of Money
A dollar today is worth more than a dollar in the future because money
has earning power. In other words, if today you put a dollar in a bank
where it earns interest, it is worth more than a dollar tomorrow. This
change in value over time is called the time value of money. Some
have called this the most important concept in economic analysis.
As an example, think of the price of a car. In 1980, a car would have

cost about $20,000. Today, a car is about $30,000. So in about 30
years, your initial $20k would only pay 2/3 of the current cost of a car.
Thus, the value of a dollar falls as time moves on.
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Financial Terms:
1. Annual value (A or AV) – a series of equal cash flows, most
often savings in our applications, that occur evenly spaced
over time. For this course we use end of year accounting,
meaning that cash flows occur only at end of year. A is also
known as the Annuity Amount. Also called annual worth
(AW).
2. Present Value (P or PV) – the value of a future amount in
today’s dollars (now). For cost, it is the cost now in most
cases. Also called present worth (PW).
3. Future Value (F or FV) – the value of a single deposited
amount or a series of payments at some point in the future.
Also called future worth (FW).
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Financial Terms:
4. Life Cycle Cost (LCC) – The sum of the present values of all
costs of a system over its lifetime. Life Cycle Cost Analysis
(LCCA) is the overall process of including all of the associated
costs and savings of an asset or project over the complete life
of the asset or project within the economic analysis.
5. Net Present Value (NPV) - The difference between the

present value of an investment’s future net cash flows and
the initial investment (if NPV is zero, the project would
equate to investing the same amount of dollars at the
desired rate). Also called net present worth.
6. Internal Rate of Return (IRR) - The discount rate at which the

present value of a project costs equals the present value of
the project savings.
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Financial Terms:
7. Interest Rate (I or i): This term can be used different ways
• If borrowing money, the “finance rate” is the rate you are
charged
• Conversely, if you are investing money in an account, the
“interest rate” dictates how fast the money will grow over
time
• Similarly, when we are moving money backwards
through time, we use the “discount rate”(MARR) to
determine the PV of a cash flow
8. Minimum acceptable rate of return (MARR): The rate

determined by a company or organization to be the
minimum allowed/required for investments/ projects.
(desired interest rate, hurdle rate, discount rate)
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Financial Terms:
7. Depreciation: Amount of economic value that is used up
during the accounting period. Depreciation is not a cash flow.
It is for accounting purposes only.
8. Pay back period: is simply the number of years needed to

recover an initial investment
 Simple pay back period n = P /A
Is not accurate since it ignores the time value of money
 Discounted pay back period is calculated after
discounting the net cash flow using a Minimum
Attractive (Acceptable) Rate of Return MARR
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Financial Terms:
9. Salvage Value - the value of the equipment at the end of the

project life. Sometimes salvage value is positive (sell it) and
sometimes it is negative (pay to remove or dispose it).
Salvage value is usually ignored in this section, but if it does
occur in a problem, treat it as a future value.
9. Life of the project (N) - the number of years that we will

receive annual savings. This is what we use in our
economic analysis.
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 The concept of time value of money employs the following

terms
 P Present worth, amount of money at the present

time
 F Future worth, amount of money at some future
time
 A A series of consecutive, equal, end-of-
period amounts of money
 N Number of interest periods
 I Interest rate per interest period in %
The most common engineering economy problems involve

the use of (N) and ( i ) and at least two of the remaining
three terms.
Cash flow diagrams
 Every project has cash receipts (income) and cash
disbursements (costs) that occur over a certain time span.
 These receipts and disbursements in a given time interval are

referred to as CASH FLOW.
Positive signs usually represent receipts while negative signs
represents costs, and at any point of time;
Net cash flow = receipts – disbursements
 Since each receipts or disbursement takes place at a certain

time during interest period, a simplifying assumption is made
that all cash flows occurs at the end of interest period.
This is known as end-of-period convention

Cash Flow Diagrams (CFD)
A CFD is a drawing depicting the cash flows of a project over the life of the
project and can be helpful to some energy management projects to ensure all
of the cash flows have been accounted for.
P represents a
“ ”
Present cash flow.
May be (+) or (-)
“A” represents an Annual cash flow. May be

(+) or (-). Starts at end of year 1 and
Continues through life of project
(simplifying assumption)
F” represents a Future cash

flow. May be (+) or (-). Occurs
at end of some future year
(usually end of project).
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Visual PV
What is the PV of $10,000 to be received 5 years in the

future?
$12,000
$10,000
$10,000
$9,091
$8,000
$8,264
$7,513
$6,000 $6,830
$6,209
$4,000
$2,000
$0
0 1 2 3 4 5 6
PV at End of Year – Assuming 10% Discount Rate
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1) Single Payment Compound Amount Factor

A MATHEMATICAL FORMULA IS DEVELOPED TO DETERMINE THE EQUIVALENT
AMOUNT OF MONEY( F ) THAT IS ACCUMULATED AFTER ( N ) YEARS, FROM A
SINGLE INVESTMENT (P) WHEN AN INTEREST RATE (I) IS COMPOUNDED ONE
TIME PER YEAR.
SPCAF, or Compound Factor, Is Given the Notation

[ F/ P i % n ]
i.e. To Find Future Value for a Given Present Value After (N) Years and (I)
Interest Rate Per Year.
Mathematical Formula F = P [ 1+ i ]n
[ 1+ i] n Is the Compound Factor
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2) Single Payment Present Worth Factor
A MATHEMATICAL FORMULA DEVELOPED TO DETERMINE THE PRESENT
WORTH (P) OF A GIVEN FUTURE AMOUNT (F) AFTER (N) YEARS AT AN
INTEREST RATE ( I ).
SPPWF, OR DISCOUNT FACTOR, IS GIVEN THE NOTATION
[ P / F i %, n ]
I.E. To Find Present Value for a Given Future Value (N) Years Apart
From the Present Time With an Interest Rate ( I %)
Mathematical Formula P = F { 1 / ( 1+i ) n }
1 / ( 1+i ) n Is the Discount Factor
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3) Uniform Series Present Worth Factor

A FORMULA DEVELOPED TO DETERMINE THE
PRESENT WORTH OF A GIVEN EQUIVALENT, UNIFORM, END-OF-YEAR
AMOUNTS, WHICH BEGIN AT THE END OF THE FIRST YEAR AND
EXTENDS TO (N) YEARS AT AN INTEREST RATE (I).
USPWF IS GIVEN THE NOTATION
[ P/A i %, n ]
To Find Present Worth Knowing the Equivalent Uniform Annual
Amounts for (N) Years and (I) Interest Rate.
Mathematical Formula P = A { [ ( 1+i ) n – 1 ] / i ( 1+i ) n }
( 1+i ) n – 1 / I ( 1+i ) n Is the Uniform Series Present Worth Factor.
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4) Capital Recovery Factor

EQUIVALENT UNIFORM AMOUNTS OVER (N) YEARS FOR A GIVEN
INVESTMENT (P) WHEN THE INTEREST RATE IS (I %)
CRF, IS GIVEN THE NOTATION
[ A / P, i %, n ]
TO FIND THE ANNUAL AMOUNTS FOR ( N ) YEARS WHEN THE

INTEREST IS (I %) KNOWING THE PRESENT WORTH.
Mathematical Formula A = P { i ( 1+i ) n / [ ( 1+i ) n – 1 ] }
i ( 1+i ) n /( 1+i ) n – 1 Is the Capital Recovery Factor
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5) Sinking Fund Factor

UNIFORM ANNUAL AMOUNTS THAT WOULD BE EQUIVALENT TO GIVEN
FUTURE WORTH AFTER (N) YEARS WITH AN INTEREST RATE ( I % ).
SFF, IS GIVEN THE NOTATION
[A/F i %,n ]
TO FIND THE EQUIVALENT ANNUAL AMOUNTS KNOWING A FUTURE

WORTH.
Mathematical Formula A= F { i / ( 1+i ) n – 1 } i /( 1+i ) n – 1
Is the Sinking Fund Factor.
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6) Uniform Series Compound Amount

A FORMULA GIVEN TO DETERMINE THE
FUTURE AMOUNT OF A GIVEN UNIFORM ANNUAL AMOUNTS
OVER (N) YEARS WITH AN INTEREST RATE ( I % ).
USCAF, IS GIVEN THE NOTATION
[ F / A, i%, n ]
TO FIND THE FUTURE WORTH KNOWING THE UNIFORM EQUAL

ANNUAL AMOUNTS FOR (N) YEARS AND (i %) INTEREST RATE.
MATHEMATICAL FORMULA F = A { ( 1+ i ) n– 1 / i }
{( 1+ i ) n – 1 } / i Is the Uniform Series Compound Amount

Factor.
P, A, I, N
Where I is known as the interest rate, discount factor, minimum
acceptable rate of return, or (in some cases) internal rate of
return.
Factors are tabulated in all Economy texts

What I want to know Given What I do know
- / - , I, N
( )
P/A, I, N
( )
“Find P given that A, I, and N are known”
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2 To
Factor Notation Find
Given Formula Math. Expression
Single Payment
Compound amount
F / P i%,n F P F=P [ F / P i %,n ] F = P [ 1+i] n
SPCAF
Single payment
present worth
P / F i%,n P F P=F [ P / F i %,n ] P = F/ [ 1+i] n
SPPWF
Uniform series
present worth P = A [ 1+i] n - 1
USPWF
P / Ai %,n P A P=A[ P / A i %,n ]
i [ 1+i] n
Capital Recovery
Factor A = P i [ 1+i] n
CRF
A / P i%,n A P A=P [ A/ P i %,n ]
[ 1+i] n - 1
Sinking Fund
Factor
A= F i
A / F i%,n A F A=F [ A/ F i %,n ]
SFF [ 1+i] n - 1
Uniform series
compound amount F = A [ 1+i] n - 1
USCAF
F / Ai %,n F A F=A[ F/ A i %,n ]
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If The Present Amount Pis IterestRate

100,000 15%
Known
Period 5 Years
Formula Excel Function

Single Payment Compound AmountFactor SPCAF F = P (1+i)^n 2.0114 FV (P) $201,136
Single Payment Present Worth Factor SPPWF P = F / (1+i)^n 0.4972 PV (f) $100,000
Uniform Sereis Present Worht Factor USPWF P = A [ (1+i)^n ‐ 1 / i(1+i)^n] 3.3522 PV (A) $100,000
Capital Recovery Factor CRF A = P [ i(1+i)^n / (1+i)^n ‐ 1] 0.2983 PMT(P) $29,832
Sinking Fund Factor SFF A = F[ i / (1+i)^n ‐ 1 ] 0.1483 PMT(F) $29,832
Uniform Sereis Compound AmountFactor USCAF F = A [ (1+i)^n ‐ 1 / i] 6.7424 FV (A) $201,136
0 1 2 3 4 5 Total
Future Amount F/ P 100,00 115,000 132,250 152,088 174,901 201,136
0
Equal Annual A/P 29,832 29,832 29,832 29,832 29,832 149,158

Amount
InterestOn
0 4,475 9,621 15,539 22,344 51,978
Balance
Balance 29,832 64,138 103,590 148,960 201,136 201,136
LE.100,000 is equivalent to LE.201,136 after 5 years if the

interest rate applied is 15%. And is equivalent to LE.29,832 per
year for 5 years applying the same interestrate.
Examples – Solution 1
A = $15,000 i = 20%
Use NPV:
P=?
We are given:
Savings (A) =
$15,000 Cost (P) = 1 2 3 4 5 N
$58,000
Discount rate (I) = 20%
Life (n) = 10 years
NPV = A (P/A, 20%, 10) - Cost
, . - ,
= $4,887.50
Since NPV > 0, we would recommend this project (at NPV=0 we would
be indifferent economically). The $4,887.50 means that the company
would earn $4,887.50 (in present value terms) over what would be
earned by investing the $58,000 in an alternative investment at 20% for
10 years.
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Energy Auditing and Energy Efficienc y
Slide 30/01/2021
Examples – Question 2
A new lighting system will last 6 years and save $5,000 per
year. The company purchasing it requires a hurdle rate of
15%. In order to meet the company’s financial requirement,
how much can they pay for the lighting system?
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Slide 30/01/2021
We are given:
If this project is “attractive”, then the maximum cost cannot exceed the
PV of the Savings Cash Flows. Thus, we seek the PV of the Savings
Cash Flows:
A = $5,000 i = 15%
Savings (A) = $5,000
Discount rate (I) = P=?
15% Life (n) = 6 years
1 2 3 4 5 N
Cost you can afford = A (P/A, 15%,

6) P = $5,000 (3.7845)
= $18,922.50
This is the maximum we can pay for this project in order to
achieve at least a 15% return.
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Slide 30/01/2021
A boiler economizer will cost $20,000 and last 5 years.

How much will the economizer have to save each year to
return 12%?
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Slide 30/01/2021
A= ? i = 12%
Find the savings (A) P=?
We’re given:
Cost = 20,000 1 2 3 4 5 N
Cost (P) = $20,000
Discount rate (I) = 12%
Life (n) = 5 years
Thus, it better have $20,000 of “positive” Present Value… to
enable a positive NPV. So set P at $20,000 and then find A.
A = P (A/P, 12%,
5) A = $20,000
(0.2774)
= $5,548 per year
So this project must save at least this amount in order
to achieve at least a 12% return.
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Slide 30/01/2021
A company has asked you to look at two

projects, each project will last 8 years. The first
project costs $125,000 and will save $33,000
each year. The second project costs $153,000
and will save $46,000 each year. The company
has a discount rate of 12%.
Which project would you recommend?
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Slide 30/01/2021
We have two projects with the same lifespan, so we use

NPV:
Project 1 (P1) Project 2 (P2)
Savings (A) = $33,000/yr Savings (A) = $46,000/yr
Cost (P) = $125,000 Cost (P) = $153,000
Discount rate (I) = Discount rate (I) = 12%
12% Life (n) = 8 years Life (n) = 8 years
Solution: NPV1 = A (P/A, 12%, 8) - P Solution: NPV2 = A (P/A, 12%, 8) - P

NPV1 = $33,000 (4.9676) - $125,000 NPV2 = $46,000 (4.9676) - $153,000
= $38,930.80 = $75,509.60
NPV is higher for Project 2, so we would recommend it.
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Slide 30/01/2021
A company considers two projects. The first

project costs $85,000 and will save $23,000
each year. The second project costs $75,000
and will save $18,000 each year. Project 1 will
last 12 years and project 2 will last 9 years. The
company has a discount rate of 10%.
Which project would you recommend?
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Slide 30/01/2021
We have two projects with different lifespans, so use Annual Value:

Project 1 (P1) Project 2 (P2)
Savings (A) = $23,000/yr Savings (A) = $18,000/yr

Cost (P) = $85,000 Cost (P) = $75,000
Discount rate (I) = Discount rate (I) = 10%
10% Life (n) = 12 Life (n) = 9 years
years
Solution: AV1 = A – P (A/P, 10%, 12) Solution: AV2 = A – P (A/P, 10%,
AV1 = $23,000 - $85,000 (0.1468) 9) AV2 = $18,000 -
= $10,522.00 $75,000(0.1736)
= $4,980.00
AV is higher for Project 1, we would recommend doing that
project.
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Slide 30/01/2021
A software system can coordinate your facility’s

compressed air system. The software will cost
$14,000 and is expected to save $2,300 each
year for 8 years. The software requires a license
of $700 per year. Your company requires at
least a 15% return on all projects.
Would you recommend this project?
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Slide 30/01/2021
We are asked to determine if this is a good project

Single project by itself (we are really comparing this project to the “do
nothing” alternative – we still use Net Present Value to evaluate this.
Now we have an annual cost also – Hint – subtract this annual cost out
of the annual savings so we get the true annual savings
We’re given:
Savings (A) = ($2,300 - $700) =
$1,600 Cost (P) = $14,000
Discount rate (I) =
15% Life (n) = 8 years
NPV = A (P/A, 15%, 8) - P
NPV = $1,600 (4.4873) - $14,000 = - $6,820.32
Because NPV is negative, we would not recommend this project.

CEM Sample Test
Questions
On the next three slides there are 5 economic
analysis problems that are samples of typical
calculation type CEM Economic Analysis questions
You should give yourself 15 minutes to answer all of

these questions:
1. A vendor proposes a retrofit lighting system to your company. The
system will cost $100,000 installed; but it will save $15,000 per
year for the next 10 years. Your MARR is 10%. What is the net
present value of the proposed lighting retrofit?
A. -$11,839
B. -$7,831
C. $11,839
D. $17,838
2. A heat wheel can be installed on an exhaust air system to

preheat the make up air. The installed cost is $15,000 and
the unit has an economic life of 10 years. How much must
this system save each year for it to make a return of 15%?
A. $1,123
B. $1,997
C. $2,990
D. $4,312
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3. A Hockey Arena has a desiccant unit installed to assist in
controlling humidity and to make the ice harder. The unit will last 17
years and is projected to save $57,200 per year in HVAC and
Refrigeration energy costs. If the system will cost $223,650 to be
installed, what is the internal rate of return of the project?
A. 10%
B. 12%
C. 15%
D. 25%
4. An automation system that will optimize many system functions for 8

years will save $17,500 annually in energy costs. How much can be
paid for the system and meet the financial requirements of the
organization by meeting their 14% discount rate?
A. $81,181
B. $211,223
C. $326,752
D. $396,900
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energy efficient compressor as well as the standard
compressor? Which one is preferable?
5. An energy efficient air compressor will cost $30,000
installed and will require $1,000 worth of maintenance each
year for its life of 10 years. Energy costs will be $6,000 per
year. A standard air compressor will cost $25,000 and will
require $500 worth of maintenance each year for its life of
10 years. Its energy costs will be $10,000 per year. At an
interest rate of 12%, what is the Life Cycle Cost of the
A. $78,677, $58,251, standard compressor

B. $65,829, $55,348, standard air compressor
C. $55,348, $65,829, energy efficient
compressor
D. $69,551, $84,327, energy efficient
compressor
E. $37,876, $85,334, energy efficient
compressor
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Slide 30/01/2021
Answers
to the problems at the end of the slides
1. B
A (P/A, 10%, 10) - P
NPV = $15,000 (6.1446) - $100,000 = -$7,831.00
2. C
A = P (A/P, 15%, 10)
Find Savings “A”= $15,000 (0.1993) = $2,989.50
3. D
First: Cost/Savings gives the factor (P/A,i%,n)
$223,650 / $57,200 = 3.9099, go to the interest tables and look for this
value dropping down 17 years until the factor is found, the table that it
is found on is the IRR
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Slide 30/01/2021
Answers
to the problems at the end of the slides
4. A
P = A (P/A, 14%, 8)
Find Cost “P”= $17,500 (4.6389) = $81,180.75
5. D
A (P/A, 12%, 10) - P
LCC(Standard) = $10,500 (5.6502) + $25,000 = $84,327.10
A (P/A, 12%, 10) - P

LCC(EnergyEff) = $7,000 (5.6502) + $30,000 = $69,551.40
(Note for Q5: the problem asked for the answer in costs, so answers
are given in absolute value of the costs, where our solution
calculation retains the “-” sign to be consistent with our cash flow
sign convention for costs.)
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Slide 30/01/2021
LCC Time Value of Money Tables
(Interest Tables)
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Slide 30/01/2021
LCC Time Value of Money Table
Single S u m s Uniform Series

i = 4% To Find F To Find P To Find F To Find A To Find P To Find A
Given P Given F Given A Given F Given A Given P
n (F/P,i%,n) (P/F,i%,n) (F/A,i%,n) (A/F,i%,n) (P/A,i%,n) (A/P,i%,n)
1 1.0400 0.9615 1.0000 1.0000 0.9615 1.0400
2 1.0816 0.9246 2.0400 0.4902 1.8861 0.5302
3 1.1249 0.8890 3.1216 0.3203 2.7751 0.3603
4 1.1699 0.8548 4.2465 0.2355 3.6299 0.2755
5 1.2167 0.8219 5.4163 0.1846 4.4518 0.2246
6 1 . 2 6 5 3 0 . 7 9 0 3 6.6330 0 . 1 5 0 8 5 . 2 4 2 1 0 . 1 9 0 8
7 1 . 3 1 5 9 0 . 7 5 9 9 7.8983 0 . 1 2 6 6 6 . 0 0 2 1 0 . 1 6 6 6
8 1 . 3 6 8 6 0 . 7 3 0 7 9.2142 0 . 1 0 8 5 6 . 7 3 2 7 0 . 1 4 8 5
9 1 . 4 2 3 3 0 . 7 0 2 6 10.5828 0 . 0 9 4 5 7 . 4 3 5 3 0 . 1 3 4 5
10 1 . 4 8 0 2 0 . 6 7 5 6 12.0061 0 . 0 8 3 3 8 . 1 1 0 9 0 . 1 2 3 3
11 1 . 5 3 9 5 0 . 6 4 9 6 1 3 . 4 8 6 4 0 . 0 7 4 1 8.7605 0 . 1 1 4 1
12 1 . 6 0 1 0 0 . 6 2 4 6 1 5 . 0 2 5 8 0 . 0 6 6 6 9.3851 0 . 1 0 6 6
13 1 . 6 6 5 1 0 . 6 0 0 6 1 6 . 6 2 6 8 0 . 0 6 0 1 9.9856 0 . 1 0 0 1
14 1 . 7 3 1 7 0 . 5 7 7 5 1 8 . 2 9 1 9 0 . 0 5 4 7 10.5631 0 . 0 9 4 7
15 1 . 8 0 0 9 0 . 5 5 5 3 2 0 . 0 2 3 6 0 . 0 4 9 9 11.1184 0 . 0 8 9 9
16 1 . 8 7 3 0 0 . 5 3 3 9 2 1 . 8 2 4 5 0 . 0 4 5 8 1 1 . 6 5 2 3 0 . 0 8 5 8
17 1 . 9 4 7 9 0 . 5 1 3 4 2 3 . 6 9 7 5 0 . 0 4 2 2 1 2 . 1 6 5 7 0 . 0 8 2 2
18 2 . 0 2 5 8 0 . 4 9 3 6 2 5 . 6 4 5 4 0 . 0 3 9 0 1 2 . 6 5 9 3 0 . 0 7 9 0
19 2 . 1 0 6 8 0 . 4 7 4 6 2 7 . 6 7 1 2 0 . 0 3 6 1 1 3 . 1 3 3 9 0 . 0 7 6 1
20 2 . 1 9 1 1 0 . 4 5 6 4 2 9 . 7 7 8 1 0 . 0 3 3 6 1 3 . 5 9 0 3 0 . 0 7 3 6
21 2 . 2 7 8 8 0 . 4 3 8 8 3 1 . 9 6 9 2 0 . 0 3 1 3 1 4 . 0 2 9 2 0 . 0 7 1 3
22 2 . 3 6 9 9 0 . 4 2 2 0 3 4 . 2 4 8 0 0 . 0 2 9 2 1 4 . 4 5 1 1 0 . 0 6 9 2
23 2 . 4 6 4 7 0 . 4 0 5 7 3 6 . 6 1 7 9 0 . 0 2 7 3 1 4 . 8 5 6 8 0 . 0 6 7 3
24 2 . 5 6 3 3 0 . 3 9 0 1 3 9 . 0 8 2 6 0 . 0 2 5 6 1 5 . 2 4 7 0 0 . 0 6 5 6
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25 2 . 6 6 5 8 0 . 3 7 5 1 4 1 . 6 4 5 9 0 . 0 2 4 0 1 5 . 6 2 2 1 0 . 0 6 4 0
Single Sums Uniform Series
i= 5% To F i n d F To F i n d P To F i n d F To F i n d A To F i n d P To F i n d A
n ( F / P, i % , n ) ( P / F, i % , n ) (F/A,i%,n) ( A / F, i % , n ) (P/A,i%,n) ( A / P, i % , n )
1 1.0500 0.9524 1.0000 1.0000 0.9524 1.0500
2 1.1025 0.9070 2.0500 0.4878 1.8594 0.5378
3 1.1576 0.8638 3.1525 0.3172 2.7232 0.3672
4 1.2155 0.8227 4.3101 0.2320 3.5460 0.2820
5 1.2763 0.7835 5.5256 0.1810 4.3295 0.2310
6 1.3401 0.7462 6.8019 0.1470 5.0757 0.1970

7 1.4071 0.7107 8.1420 0.1228 5.7864 0.1728
8 1.4775 0.6768 9.5491 0.1047 6.4632 0.1547
9 1.5513 0.6446 11 . 0 2 6 6 0.0907 7.1078 0.1407
10 1.6289 0.6139 12.5779 0.0795 7.7217 0.1295
11 1.7103 0.5847 14.2068 0.0704 8.3064 0.1204

12 1.7959 0.5568 15.9171 0.0628 8.8633 0 . 11 2 8
13 1.8856 0.5303 17.7130 0.0565 9.3936 0.1065
14 1.9799 0.5051 19.5986 0.0510 9.8986 0.1010
15 2.0789 0.4810 21.5786 0.0463 10.3797 0.0963
16 2.1829 0.4581 23.6575 0.0423 10.8378 0.0923

17 2.2920 0.4363 25.8404 0.0387 11 . 2 7 4 1 0.0887
18 2.4066 0.4155 28.1324 0.0355 11 . 6 8 9 6 0.0855
19 2.5270 0.3957 30.5390 0.0327 12.0853 0.0827
20 2.6533 0.3769 33.0660 0.0302 12.4622 0.0802
21 2.7860 0.3589 35.7193 0.0280 12.8212 0.0780

22 2.9253 0.3418 38.5052 0.0260 13.1630 0.0760
23 3.0715 0.3256 41.4305 0.0241 13.4886 0.0741
24 3.2251 0.3101 44.5020 0.0225 13.7986 0.0725
I - Sli de 44
25 3.3864 0.2953 47.7271 0.0210 14.0939 0.0710

i = 6% To Find F To Find P To Find F To Find A To Find P To Find A
1 1.0600 0.9434 1.0000 1.0000 0.9434 1.0600
2 1.1236 0.8900 2.0600 0.4854 1.8334 0.5454
3 1.1910 0.8396 3.1836 0.3141 2.6730 0.3741
4 1.2625 0.7921 4.3746 0.2286 3.4651 0.2886
5 1.3382 0.7473 5.6371 0.1774 4.2124 0.2374
6 1 . 4 1 8 5 0 . 7 0 5 0 6.9753 0 . 1 4 3 4 4 . 9 1 7 3 0 . 2 0 3 4
7 1 . 5 0 3 6 0 . 6 6 5 1 8.3938 0 . 1 1 9 1 5 . 5 8 2 4 0 . 1 7 9 1
8 1 . 5 9 3 8 0 . 6 2 7 4 9.8975 0 . 1 0 1 0 6 . 2 0 9 8 0 . 1 6 1 0
9 1 . 6 8 9 5 0 . 5 9 1 9 11.4913 0 . 0 8 7 0 6 . 8 0 1 7 0 . 1 4 7 0
10 1 . 7 9 0 8 0 . 5 5 8 4 13.1808 0 . 0 7 5 9 7 . 3 6 0 1 0 . 1 3 5 9
11 1 . 8 9 8 3 0 . 5 2 6 8 1 4 . 9 7 1 6 0 . 0 6 6 8 7 . 8 8 6 9 0 . 1 2 6 8
12 2 . 0 1 2 2 0 . 4 9 7 0 1 6 . 8 6 9 9 0 . 0 5 9 3 8 . 3 8 3 8 0 . 1 1 9 3
13 2 . 1 3 2 9 0 . 4 6 8 8 1 8 . 8 8 2 1 0 . 0 5 3 0 8 . 8 5 2 7 0 . 1 1 3 0
14 2 . 2 6 0 9 0 . 4 4 2 3 2 1 . 0 1 5 1 0 . 0 4 7 6 9 . 2 9 5 0 0 . 1 0 7 6
15 2 . 3 9 6 6 0 . 4 1 7 3 2 3 . 2 7 6 0 0 . 0 4 3 0 9 . 7 1 2 2 0 . 1 0 3 0
16 2 . 5 4 0 4 0 . 3 9 3 6 2 5 . 6 7 2 5 0 . 0 3 9 0 1 0 . 1 0 5 9 0 . 0 9 9 0
17 2 . 6 9 2 8 0 . 3 7 1 4 2 8 . 2 1 2 9 0 . 0 3 5 4 1 0 . 4 7 7 3 0 . 0 9 5 4
18 2 . 8 5 4 3 0 . 3 5 0 3 3 0 . 9 0 5 7 0 . 0 3 2 4 1 0 . 8 2 7 6 0 . 0 9 2 4
19 3 . 0 2 5 6 0 . 3 3 0 5 3 3 . 7 6 0 0 0 . 0 2 9 6 1 1 . 1 5 8 1 0 . 0 8 9 6
20 3 . 2 0 7 1 0 . 3 1 1 8 3 6 . 7 8 5 6 0 . 0 2 7 2 1 1 . 4 6 9 9 0 . 0 8 7 2
21 3 . 3 9 9 6 0 . 2 9 4 2 3 9 . 9 9 2 7 0 . 0 2 5 0 1 1 . 7 6 4 1 0 . 0 8 5 0
22 3 . 6 0 3 5 0 . 2 7 7 5 4 3 . 3 9 2 3 0 . 0 2 3 0 1 2 . 0 4 1 6 0 . 0 8 3 0
23 3 . 8 1 9 7 0 . 2 6 1 8 4 6 . 9 9 5 8 0 . 0 2 1 3 1 2 . 3 0 3 4 0 . 0 8 1 3
24 4 . 0 4 8 9 0 . 2 4 7 0 5 0 . 8 1 5 6 0 . 0 1 9 7 1 2 . 5 5 0 4 0 . 0 7 9 7
I - Slid e 45
25 4 . 2 9 1 9 0 . 2 3 3 0 5 4 . 8 6 4 5 0 . 0 1 8 2 1 2 . 7 8 3 4 0 . 0 7 8 2

i = 8 % To Find F To Find P To Find F To Find A To Find P To Find A
1 1.0800 0.9259 1.0000 1.0000 0.9259 1.0800
2 1.1664 0.8573 2.0800 0.4808 1.7833 0.5608
3 1.2597 0.7938 3.2464 0.3080 2.5771 0.3880
4 1.3605 0.7350 4.5061 0.2219 3.3121 0.3019
5 1.4693 0.6806 5.8666 0.1705 3.9927 0.2505
6 1 . 5 8 6 9 0 . 6 3 0 2 7.3359 0 . 1 3 6 3 4 . 6 2 2 9 0 . 2 1 6 3
7 1 . 7 1 3 8 0 . 5 8 3 5 8.9228 0 . 1 1 2 1 5 . 2 0 6 4 0 . 1 9 2 1
8 1 . 8 5 0 9 0 . 5 4 0 3 10.6366 0 . 0 9 4 0 5 . 7 4 6 6 0 . 1 7 4 0
9 1 . 9 9 9 0 0 . 5 0 0 2 12.4876 0 . 0 8 0 1 6 . 2 4 6 9 0 . 1 6 0 1
10 2 . 1 5 8 9 0 . 4 6 3 2 14.4866 0 . 0 6 9 0 6 . 7 1 0 1 0 . 1 4 9 0
1 1 2 . 3 3 1 6 0 . 4 2 8 9 1 6 . 6 4 5 5 0 . 0 6 0 1 7 . 1 3 9 0 0 . 1 4 0 1
1 2 2 . 5 1 8 2 0 . 3 9 7 1 1 8 . 9 7 7 1 0 . 0 5 2 7 7 . 5 3 6 1 0 . 1 3 2 7
1 3 2 . 7 1 9 6 0 . 3 6 7 7 2 1 . 4 9 5 3 0 . 0 4 6 5 7 . 9 0 3 8 0 . 1 2 6 5
1 4 2 . 9 3 7 2 0 . 3 4 0 5 2 4 . 2 1 4 9 0 . 0 4 1 3 8 . 2 4 4 2 0 . 1 2 1 3
1 5 3 . 1 7 2 2 0 . 3 1 5 2 2 7 . 1 5 2 1 0 . 0 3 6 8 8 . 5 5 9 5 0 . 1 1 6 8
1 6 3 . 4 2 5 9 0 . 2 9 1 9 3 0 . 3 2 4 3 0 . 0 3 3 0 8 . 8 5 1 4 0 . 1 1 3 0
1 7 3 . 7 0 0 0 0 . 2 7 0 3 3 3 . 7 5 0 2 0 . 0 2 9 6 9 . 1 2 1 6 0 . 1 0 9 6
1 8 3 . 9 9 6 0 0 . 2 5 0 2 3 7 . 4 5 0 2 0 . 0 2 6 7 9 . 3 7 1 9 0 . 1 0 6 7
1 9 4 . 3 1 5 7 0 . 2 3 1 7 4 1 . 4 4 6 3 0 . 0 2 4 1 9 . 6 0 3 6 0 . 1 0 4 1
2 0 4 . 6 6 1 0 0 . 2 1 4 5 4 5 . 7 6 2 0 0 . 0 2 1 9 9 . 8 1 8 1 0 . 1 0 1 9
2 1 5 . 0 3 3 8 0 . 1 9 8 7 5 0 . 4 2 2 9 0 . 0 1 9 8 1 0 . 0 1 6 8 0 . 0 9 9 8
2 2 5 . 4 3 6 5 0 . 1 8 3 9 5 5 . 4 5 6 8 0 . 0 1 8 0 1 0 . 2 0 0 7 0 . 0 9 8 0
2 3 5 . 8 7 1 5 0 . 1 7 0 3 6 0 . 8 9 3 3 0 . 0 1 6 4 1 0 . 3 7 1 1 0 . 0 9 6 4
2 4 6 . 3 4 1 2 0 . 1 5 7 7 6 6 . 7 6 4 8 0 . 0 1 5 0 1 0 . 5 2 8 8 0 . 0 9 5 0
I - Slid e 46
2 5 6 . 8 4 8 5 0 . 1 4 6 0 7 3 . 1 0 5 9 0 . 0 1 3 7 1 0 . 6 7 4 8 0 . 0 9 3 7

i = 1 0 % To Find F To Find P To Find F To Find A To Find P To Find A
1 1.1000 0.9091 1.0000 1.0000 0.9091 1.1000
2 1.2100 0.8264 2.1000 0.4762 1.7355 0.5762
3 1.3310 0.7513 3.3100 0.3021 2.4869 0.4021
4 1.4641 0.6830 4.6410 0.2155 3.1699 0.3155
5 1.6105 0.6209 6.1051 0.1638 3.7908 0.2638
6 1 . 7 7 1 6 0 . 5 6 4 5 7.7156 0 . 1 2 9 6 4 . 3 5 5 3 0 . 2 2 9 6
7 1 . 9 4 8 7 0 . 5 1 3 2 9.4872 0 . 1 0 5 4 4 . 8 6 8 4 0 . 2 0 5 4
8 2 . 1 4 3 6 0 . 4 6 6 5 11.4359 0 . 0 8 7 4 5 . 3 3 4 9 0 . 1 8 7 4
9 2 . 3 5 7 9 0 . 4 2 4 1 13.5795 0 . 0 7 3 6 5 . 7 5 9 0 0 . 1 7 3 6
10 2 . 5 9 3 7 0 . 3 8 5 5 15.9374 0 . 0 6 2 7 6 . 1 4 4 6 0 . 1 6 2 7
1 1 2 . 8 5 3 1 0 . 3 5 0 5 1 8 . 5 3 1 2 0 . 0 5 4 0 6 . 4 9 5 1 0 . 1 5 4 0
1 2 3 . 1 3 8 4 0 . 3 1 8 6 2 1 . 3 8 4 3 0 . 0 4 6 8 6 . 8 1 3 7 0 . 1 4 6 8
1 3 3 . 4 5 2 3 0 . 2 8 9 7 2 4 . 5 2 2 7 0 . 0 4 0 8 7 . 1 0 3 4 0 . 1 4 0 8
1 4 3 . 7 9 7 5 0 . 2 6 3 3 2 7 . 9 7 5 0 0 . 0 3 5 7 7 . 3 6 6 7 0 . 1 3 5 7
1 5 4 . 1 7 7 2 0 . 2 3 9 4 3 1 . 7 7 2 5 0 . 0 3 1 5 7 . 6 0 6 1 0 . 1 3 1 5
1 6 4 . 5 9 5 0 0 . 2 1 7 6 3 5 . 9 4 9 7 0 . 0 2 7 8 7 . 8 2 3 7 0 . 1 2 7 8
1 7 5 . 0 5 4 5 0 . 1 9 7 8 4 0 . 5 4 4 7 0 . 0 2 4 7 8 . 0 2 1 6 0 . 1 2 4 7
1 8 5 . 5 5 9 9 0 . 1 7 9 9 4 5 . 5 9 9 2 0 . 0 2 1 9 8 . 2 0 1 4 0 . 1 2 1 9
1 9 6 . 1 1 5 9 0 . 1 6 3 5 5 1 . 1 5 9 1 0 . 0 1 9 5 8 . 3 6 4 9 0 . 1 1 9 5
2 0 6 . 7 2 7 5 0 . 1 4 8 6 5 7 . 2 7 5 0 0 . 0 1 7 5 8 . 5 1 3 6 0 . 1 1 7 5
2 1 7.4002 0 . 1 3 5 1 6 4 . 0 0 2 5 0.0156 8 . 6 4 8 7 0 . 1 1 5 6
2 2 8.1403 0 . 1 2 2 8 7 1 . 4 0 2 7 0.0140 8 . 7 7 1 5 0 . 1 1 4 0
2 3 8.9543 0 . 1 1 1 7 7 9 . 5 4 3 0 0.0126 8 . 8 8 3 2 0 . 1 1 2 6
2 4 9.8497 0 . 1 0 1 5 8 8 . 4 9 7 3 0.0113 8 . 9 8 4 7 0 . 1 1 1 3
I - Slide 47
2 5 10.8347 0 . 0 9 2 3 9 8 . 3 4 7 1 0.0102 9 . 0 7 7 0 0 . 1 1 0 2

1 1.1200 0.8929 1.0000 1.0000 0.8929 1.1200
2 1.2544 0.7972 2.1200 0.4717 1.6901 0.5917
3 1.4049 0.7118 3.3744 0.2963 2.4018 0.4163
4 1.5735 0.6355 4.7793 0.2092 3.0373 0.3292
5 1.7623 0.5674 6.3528 0.1574 3.6048 0.2774
6 1 . 9 7 3 8 0 . 5 0 6 6 8.1152 0 . 1 2 3 2 4 . 1 1 1 4 0 . 2 4 3 2
7 2 . 2 1 0 7 0 . 4 5 2 3 10.0890 0 . 0 9 9 1 4 . 5 6 3 8 0 . 2 1 9 1
8 2 . 4 7 6 0 0 . 4 0 3 9 12.2997 0 . 0 8 1 3 4 . 9 6 7 6 0 . 2 0 1 3
9 2 . 7 7 3 1 0 . 3 6 0 6 14.7757 0 . 0 6 7 7 5 . 3 2 8 2 0 . 1 8 7 7
10 3 . 1 0 5 8 0 . 3 2 2 0 17.5487 0 . 0 5 7 0 5 . 6 5 0 2 0 . 1 7 7 0
1 1 3 . 4 7 8 5 0 . 2 8 7 5 2 0 . 6 5 4 6 0 . 0 4 8 4 5 . 9 3 7 7 0 . 1 6 8 4
1 2 3 . 8 9 6 0 0 . 2 5 6 7 2 4 . 1 3 3 1 0 . 0 4 1 4 6 . 1 9 4 4 0 . 1 6 1 4
1 3 4 . 3 6 3 5 0 . 2 2 9 2 2 8 . 0 2 9 1 0 . 0 3 5 7 6 . 4 2 3 5 0 . 1 5 5 7
1 4 4 . 8 8 7 1 0 . 2 0 4 6 3 2 . 3 9 2 6 0 . 0 3 0 9 6 . 6 2 8 2 0 . 1 5 0 9
1 5 5 . 4 7 3 6 0 . 1 8 2 7 3 7 . 2 7 9 7 0 . 0 2 6 8 6 . 8 1 0 9 0 . 1 4 6 8
1 6 6 . 1 3 0 4 0 . 1 6 3 1 4 2 . 7 5 3 3 0 . 0 2 3 4 6 . 9 7 4 0 0 . 1 4 3 4
1 7 6 . 8 6 6 0 0 . 1 4 5 6 4 8 . 8 8 3 7 0 . 0 2 0 5 7 . 1 1 9 6 0 . 1 4 0 5
1 8 7 . 6 9 0 0 0 . 1 3 0 0 5 5 . 7 4 9 7 0 . 0 1 7 9 7 . 2 4 9 7 0 . 1 3 7 9
1 9 8 . 6 1 2 8 0 . 1 1 6 1 6 3 . 4 3 9 7 0 . 0 1 5 8 7 . 3 6 5 8 0 . 1 3 5 8
2 0 9 . 6 4 6 3 0 . 1 0 3 7 7 2 . 0 5 2 4 0 . 0 1 3 9 7 . 4 6 9 4 0 . 1 3 3 9
2 1 1 0 . 8 0 3 8 0 . 0 9 2 6 81.6987 0 . 0 1 2 2 7 . 5 6 2 0 0 . 1 3 2 2
2 2 1 2 . 1 0 0 3 0 . 0 8 2 6 92.5026 0 . 0 1 0 8 7 . 6 4 4 6 0 . 1 3 0 8
2 3 1 3 . 5 5 2 3 0 . 0 7 3 8 104.6029 0 . 0 0 9 6 7 . 7 1 8 4 0 . 1 2 9 6
2 4 1 5 . 1 7 8 6 0 . 0 6 5 9 118.1552 0 . 0 0 8 5 7 . 7 8 4 3 0 . 1 2 8 5
I - Slide 48
2 5 1 7 . 0 0 0 1 0 . 0 5 8 8 133.3339 0 . 0 0 7 5 7 . 8 4 3 1 0 . 1 2 7 5

1 1.1400 0.8772 1.0000 1.0000 0.8772 1.1400
2 1.2996 0.7695 2.1400 0.4673 1.6467 0.6073
3 1.4815 0.6750 3.4396 0.2907 2.3216 0.4307
4 1.6890 0.5921 4.9211 0.2032 2.9137 0.3432
5 1.9254 0.5194 6.6101 0.1513 3.4331 0.2913
6 2 . 1 9 5 0 0 . 4 5 5 6 8.5355 0 . 1 1 7 2 3 . 8 8 8 7 0 . 2 5 7 2
7 2 . 5 0 2 3 0 . 3 9 9 6 10.7305 0 . 0 9 3 2 4 . 2 8 8 3 0 . 2 3 3 2
8 2 . 8 5 2 6 0 . 3 5 0 6 13.2328 0 . 0 7 5 6 4 . 6 3 8 9 0 . 2 1 5 6
9 3 . 2 5 1 9 0 . 3 0 7 5 16.0853 0 . 0 6 2 2 4 . 9 4 6 4 0 . 2 0 2 2
10 3 . 7 0 7 2 0 . 2 6 9 7 19.3373 0 . 0 5 1 7 5 . 2 1 6 1 0 . 1 9 1 7
1 1 4 . 2 2 6 2 0.2366 2 3 . 0 4 4 5 0 . 0 4 3 4 5 . 4 5 2 7 0.1834
1 2 4 . 8 1 7 9 0.2076 2 7 . 2 7 0 7 0 . 0 3 6 7 5 . 6 6 0 3 0.1767
1 3 5 . 4 9 2 4 0.1821 3 2 . 0 8 8 7 0 . 0 3 1 2 5 . 8 4 2 4 0.1712
1 4 6 . 2 6 1 3 0.1597 3 7 . 5 8 1 1 0 . 0 2 6 6 6 . 0 0 2 1 0.1666
1 5 7 . 1 3 7 9 0.1401 4 3 . 8 4 2 4 0 . 0 2 2 8 6 . 1 4 2 2 0.1628
1 6 8.1372 0 . 1 2 2 9 50.9804 0 . 0 1 9 6 6 . 2 6 5 1 0 . 1 5 9 6
1 7 9.2765 0 . 1 0 7 8 59.1176 0 . 0 1 6 9 6 . 3 7 2 9 0 . 1 5 6 9
1 8 10.5752 0 . 0 9 4 6 68.3941 0 . 0 1 4 6 6 . 4 6 7 4 0 . 1 5 4 6
1 9 12.0557 0 . 0 8 2 9 78.9692 0 . 0 1 2 7 6 . 5 5 0 4 0 . 1 5 2 7
2 0 13.7435 0 . 0 7 2 8 91.0249 0 . 0 1 1 0 6 . 6 2 3 1 0 . 1 5 1 0
2 1 1 5 . 6 6 7 6 0 . 0 6 3 8 1 0 4 . 7 6 8 4 0 . 0 0 9 5 6 . 6 8 7 0 0 . 1 4 9 5
2 2 1 7 . 8 6 1 0 0 . 0 5 6 0 1 2 0 . 4 3 6 0 0 . 0 0 8 3 6 . 7 4 2 9 0 . 1 4 8 3
2 3 2 0 . 3 6 1 6 0 . 0 4 9 1 1 3 8 . 2 9 7 0 0 . 0 0 7 2 6 . 7 9 2 1 0 . 1 4 7 2
2 4 2 3 . 2 1 2 2 0 . 0 4 3 1 1 5 8 . 6 5 8 6 0 . 0 0 6 3 6 . 8 3 5 1 0 . 1 4 6 3
I - Slide 49
2 5 2 6 . 4 6 1 9 0 . 0 3 7 8 1 8 1 . 8 7 0 8 0 . 0 0 5 5 6 . 8 7 2 9 0 . 1 4 5 5

1 1.1500 0.8696 1.0000 1.0000 0.8696 1.1500
2 1.3225 0.7561 2.1500 0.4651 1.6257 0.6151
3 1.5209 0.6575 3.4725 0.2880 2.2832 0.4380
4 1.7490 0.5718 4.9934 0.2003 2.8550 0.3503
5 2.0114 0.4972 6.7424 0.1483 3.3522 0.2983
6 2 . 3 1 3 1 0 . 4 3 2 3 8.7537 0 . 1 1 4 2 3 . 7 8 4 5 0 . 2 6 4 2
7 2 . 6 6 0 0 0 . 3 7 5 9 11.0668 0 . 0 9 0 4 4 . 1 6 0 4 0 . 2 4 0 4
8 3 . 0 5 9 0 0 . 3 2 6 9 13.7268 0 . 0 7 2 9 4 . 4 8 7 3 0 . 2 2 2 9
9 3 . 5 1 7 9 0 . 2 8 4 3 16.7858 0 . 0 5 9 6 4 . 7 7 1 6 0 . 2 0 9 6
10 4 . 0 4 5 6 0 . 2 4 7 2 20.3037 0 . 0 4 9 3 5 . 0 1 8 8 0 . 1 9 9 3
1 1 4 . 6 5 2 4 0 . 2 1 4 9 2 4 . 3 4 9 3 0.0411 5 . 2 3 3 7 0 . 1 9 1 1
1 2 5 . 3 5 0 3 0 . 1 8 6 9 2 9 . 0 0 1 7 0.0345 5 . 4 2 0 6 0 . 1 8 4 5
1 3 6 . 1 5 2 8 0 . 1 6 2 5 3 4 . 3 5 1 9 0.0291 5 . 5 8 3 1 0 . 1 7 9 1
1 4 7 . 0 7 5 7 0 . 1 4 1 3 4 0 . 5 0 4 7 0.0247 5 . 7 2 4 5 0 . 1 7 4 7
1 5 8 . 1 3 7 1 0 . 1 2 2 9 4 7 . 5 8 0 4 0.0210 5 . 8 4 7 4 0 . 1 7 1 0
1 6 9.3576 0 . 1 0 6 9 55.7175 0 . 0 1 7 9 5 . 9 5 4 2 0 . 1 6 7 9
1 7 10.7613 0 . 0 9 2 9 65.0751 0 . 0 1 5 4 6 . 0 4 7 2 0 . 1 6 5 4
1 8 12.3755 0 . 0 8 0 8 75.8364 0 . 0 1 3 2 6 . 1 2 8 0 0 . 1 6 3 2
1 9 14.2318 0 . 0 7 0 3 88.2118 0 . 0 1 1 3 6 . 1 9 8 2 0 . 1 6 1 3
2 0 16.3665 0 . 0 6 1 1 102.4436 0 . 0 0 9 8 6 . 2 5 9 3 0 . 1 5 9 8
2 1 1 8 . 8 2 1 5 0 . 0 5 3 1 1 1 8 . 8 1 0 1 0 . 0 0 8 4 6 . 3 1 2 5 0 . 1 5 8 4
2 2 2 1 . 6 4 4 7 0 . 0 4 6 2 1 3 7 . 6 3 1 6 0 . 0 0 7 3 6 . 3 5 8 7 0 . 1 5 7 3
2 3 2 4 . 8 9 1 5 0 . 0 4 0 2 1 5 9 . 2 7 6 4 0 . 0 0 6 3 6 . 3 9 8 8 0 . 1 5 6 3
2 4 2 8 . 6 2 5 2 0 . 0 3 4 9 1 8 4 . 1 6 7 8 0 . 0 0 5 4 6 . 4 3 3 8 0 . 1 5 5 4
I - Slide 50
2 5 3 2 . 9 1 9 0 0 . 0 3 0 4 2 1 2 . 7 9 3 0 0 . 0 0 4 7 6 . 4 6 4 1 0 . 1 5 4 7

1 1.2000 0.8333 1.0000 1.0000 0.8333 1.2000
2 1.4400 0.6944 2.2000 0.4545 1.5278 0.6545
3 1.7280 0.5787 3.6400 0.2747 2.1065 0.4747
4 2.0736 0.4823 5.3680 0.1863 2.5887 0.3863
5 2.4883 0.4019 7.4416 0.1344 2.9906 0.3344
6 2 . 9 8 6 0 0 . 3 3 4 9 9.9299 0 . 1 0 0 7 3 . 3 2 5 5 0 . 3 0 0 7
7 3 . 5 8 3 2 0 . 2 7 9 1 12.9159 0 . 0 7 7 4 3 . 6 0 4 6 0 . 2 7 7 4
8 4 . 2 9 9 8 0 . 2 3 2 6 16.4991 0 . 0 6 0 6 3 . 8 3 7 2 0 . 2 6 0 6
9 5 . 1 5 9 8 0 . 1 9 3 8 20.7989 0 . 0 4 8 1 4 . 0 3 1 0 0 . 2 4 8 1
10 6 . 1 9 1 7 0 . 1 6 1 5 25.9587 0 . 0 3 8 5 4 . 1 9 2 5 0 . 2 3 8 5
1 1 7.4301 0 . 1 3 4 6 32 . 1504 0 . 0 3 1 1 4 . 3 2 7 1 0 . 2 3 1 1
1 2 8.9161 0 . 1 1 2 2 39 . 5805 0 . 0 2 5 3 4 . 4 3 9 2 0 . 2 2 5 3
1 3 10.6993 0 . 0 9 3 5 48 . 4966 0 . 0 2 0 6 4 . 5 3 2 7 0 . 2 2 0 6
1 4 12.8392 0 . 0 7 7 9 59 . 1959 0 . 0 1 6 9 4 . 6 1 0 6 0 . 2 1 6 9
1 5 15.4070 0 . 0 6 4 9 72 . 0351 0 . 0 1 3 9 4 . 6 7 5 5 0 . 2 1 3 9
1 6 1 8 . 4 8 8 4 0 . 0 5 4 1 87.4421 0 . 0 1 1 4 4 . 7 2 9 6 0 . 2 1 1 4
1 7 2 2 . 1 8 6 1 0 . 0 4 5 1 105.9306 0 . 0 0 9 4 4 . 7 7 4 6 0 . 2 0 9 4
1 8 2 6 . 6 2 3 3 0 . 0 3 7 6 128.1167 0 . 0 0 7 8 4 . 8 1 2 2 0 . 2 0 7 8
1 9 3 1 . 9 4 8 0 0 . 0 3 1 3 154.7400 0 . 0 0 6 5 4 . 8 4 3 5 0 . 2 0 6 5
2 0 3 8 . 3 3 7 6 0 . 0 2 6 1 186.6880 0 . 0 0 5 4 4 . 8 6 9 6 0 . 2 0 5 4
2 1 4 6 . 0 0 5 1 0 . 0 2 1 7 2 2 5 . 0 2 5 6 0 . 0 0 4 4 4 . 8 9 1 3 0 . 2 0 4 4
2 2 5 5 . 2 0 6 1 0 . 0 1 8 1 2 7 1 . 0 3 0 7 0 . 0 0 3 7 4 . 9 0 9 4 0 . 2 0 3 7
2 3 6 6 . 2 4 7 4 0 . 0 1 5 1 3 2 6 . 2 3 6 9 0 . 0 0 3 1 4 . 9 2 4 5 0 . 2 0 3 1
2 4 7 9 . 4 9 6 8 0 . 0 1 2 6 3 9 2 . 4 8 4 2 0 . 0 0 2 5 4 . 9 3 7 1 0 . 2 0 2 5
I - Slid e 51
2 5 9 5 . 3 9 6 2 0 . 0 1 0 5 4 7 1 . 9 8 1 1 0 . 0 0 2 1 4 . 9 4 7 6 0 . 2 0 2 1

1 1.2500 0.8000 1.0000 1.0000 0.8000 1.2500
2 1.5625 0.6400 2.2500 0.4444 1.4400 0.6944
3 1.9531 0.5120 3.8125 0.2623 1.9520 0.5123
4 2.4414 0.4096 5.7656 0.1734 2.3616 0.4234
5 3.0518 0.3277 8.2070 0.1218 2.6893 0.3718
6 3 . 8 1 4 7 0 . 2 6 2 1 1 1 . 2 5 8 8 0 . 0 8 8 8 2 . 9 5 1 4 0 . 3 3 8 8
7 4 . 7 6 8 4 0 . 2 0 9 7 1 5 . 0 7 3 5 0 . 0 6 6 3 3 . 1 6 1 1 0 . 3 1 6 3
8 5 . 9 6 0 5 0 . 1 6 7 8 1 9 . 8 4 1 9 0 . 0 5 0 4 3 . 3 2 8 9 0 . 3 0 0 4
9 7 . 4 5 0 6 0 . 1 3 4 2 2 5 . 8 0 2 3 0 . 0 3 8 8 3 . 4 6 3 1 0 . 2 8 8 8
10 9 . 3 1 3 2 0 . 1 0 7 4 3 3 . 2 5 2 9 0 . 0 3 0 1 3 . 5 7 0 5 0 . 2 8 0 1
1 1 1 1 . 6 4 1 5 0 . 0 8 5 9 42.5661 0 . 0 2 3 5 3 . 6 5 6 4 0 . 2 7 3 5
1 2 1 4 . 5 5 1 9 0 . 0 6 8 7 54.2077 0 . 0 1 8 4 3 . 7 2 5 1 0 . 2 6 8 4
1 3 1 8 . 1 8 9 9 0 . 0 5 5 0 68.7596 0 . 0 1 4 5 3 . 7 8 0 1 0 . 2 6 4 5
1 4 2 2 . 7 3 7 4 0 . 0 4 4 0 86.9495 0 . 0 1 1 5 3 . 8 2 4 1 0 . 2 6 1 5
1 5 2 8 . 4 2 1 7 0 . 0 3 5 2 109.6868 0 . 0 0 9 1 3 . 8 5 9 3 0 . 2 5 9 1
1 6 3 5 . 5 2 7 1 0 . 0 2 8 1 138.1085 0 . 0 0 7 2 3 . 8 8 7 4 0 . 2 5 7 2
1 7 4 4 . 4 0 8 9 0 . 0 2 2 5 173.6357 0 . 0 0 5 8 3 . 9 0 9 9 0 . 2 5 5 8
1 8 5 5 . 5 1 1 2 0 . 0 1 8 0 218.0446 0 . 0 0 4 6 3 . 9 2 7 9 0 . 2 5 4 6
1 9 6 9 . 3 8 8 9 0 . 0 1 4 4 273.5558 0 . 0 0 3 7 3 . 9 4 2 4 0 . 2 5 3 7
2 0 8 6 . 7 3 6 2 0 . 0 1 1 5 342.9447 0 . 0 0 2 9 3 . 9 5 3 9 0 . 2 5 2 9
2 1 1 0 8 . 4 2 0 2 0 . 0 0 9 2 429.6809 0 . 0 0 2 3 3 . 9 6 3 1 0 . 2 5 2 3
2 2 1 3 5 . 5 2 5 3 0 . 0 0 7 4 538.1011 0 . 0 0 1 9 3 . 9 7 0 5 0 . 2 5 1 9
2 3 1 6 9 . 4 0 6 6 0 . 0 0 5 9 673.6264 0 . 0 0 1 5 3 . 9 7 6 4 0 . 2 5 1 5
2 4 2 1 1 . 7 5 8 2 0 . 0 0 4 7 843.0329 0 . 0 0 1 2 3 . 9 8 1 1 0 . 2 5 1 2
I - Slide 52
2 5 2 6 4 . 6 9 7 8 0 . 0 0 3 8 1054.7912 0 . 0 0 0 9 3 . 9 8 4 9 0 . 2 5 0 9
Single S u ms Uniform Series

1 1.3000 0.7692 1.0000 1.0000 0.7692 1.3000
2 1.6900 0.5917 2.3000 0.4348 1.3609 0.7348
3 2.1970 0.4552 3.9900 0.2506 1.8161 0.5506
4 2.8561 0.3501 6.1870 0.1616 2.1662 0.4616
5 3.7129 0.2693 9.0431 0.1106 2.4356 0.4106
6 4.8268 0 . 2 0 7 2 1 2 . 7 5 6 0 0 . 0 7 8 4 2 . 6 4 2 7 0 . 3 7 8 4
7 6.2749 0 . 1 5 9 4 1 7 . 5 8 2 8 0 . 0 5 6 9 2 . 8 0 2 1 0 . 3 5 6 9
8 8.1573 0 . 1 2 2 6 2 3 . 8 5 7 7 0 . 0 4 1 9 2 . 9 2 4 7 0 . 3 4 1 9
9 10.6045 0 . 0 9 4 3 3 2 . 0 1 5 0 0 . 0 3 1 2 3 . 0 1 9 0 0 . 3 3 1 2
10 13.7858 0 . 0 7 2 5 4 2 . 6 1 9 5 0 . 0 2 3 5 3 . 0 9 1 5 0 . 3 2 3 5
1 1 1 7 . 9 2 1 6 0 . 0 5 5 8 56.4053 0.0177 3 . 1 4 7 3 0 . 3 1 7 7
1 2 2 3 . 2 9 8 1 0 . 0 4 2 9 74.3270 0.0135 3 . 1 9 0 3 0 . 3 1 3 5
1 3 3 0 . 2 8 7 5 0 . 0 3 3 0 97.6250 0.0102 3 . 2 2 3 3 0 . 3 1 0 2
1 4 3 9 . 3 7 3 8 0 . 0 2 5 4 127.9125 0.0078 3 . 2 4 8 7 0 . 3 0 7 8
1 5 5 1 . 1 8 5 9 0 . 0 1 9 5 167.2863 0.0060 3 . 2 6 8 2 0 . 3 0 6 0
1 6 66.5417 0 . 0 1 5 0 2 1 8 . 4 722 0 . 0 0 4 6 3 . 2 8 3 2 0 . 3 0 4 6
1 7 86.5042 0 . 0 1 1 6 2 8 5 . 0 139 0 . 0 0 3 5 3 . 2 9 4 8 0 . 3 0 3 5
1 8 112.4554 0 . 0 0 8 9 3 7 1 . 5 180 0 . 0 0 2 7 3 . 3 0 3 7 0 . 3 0 2 7
1 9 146.1920 0 . 0 0 6 8 4 8 3 . 9 734 0 . 0 0 2 1 3 . 3 1 0 5 0 . 3 0 2 1
2 0 190.0496 0 . 0 0 5 3 6 3 0 . 1 655 0 . 0 0 1 6 3 . 3 1 5 8 0 . 3 0 1 6
2 1 2 4 7 . 0 6 4 5 0 . 0 0 4 0 820.2151 0 . 0 0 1 2 3 . 3 1 9 8 0 . 3 0 1 2
2 2 3 2 1 . 1 8 3 9 0 . 0 0 3 1 1067.2796 0 . 0 0 0 9 3 . 3 2 3 0 0 . 3 0 0 9
2 3 4 1 7 . 5 3 9 1 0 . 0 0 2 4 1388.4635 0 . 0 0 0 7 3 . 3 2 5 4 0 . 3 0 0 7
2 4 5 4 2 . 8 0 0 8 0 . 0 0 1 8 1806.0026 0 . 0 0 0 6 3 . 3 2 7 2 0 . 3 0 0 6
I - Slid e 53
2 5 7 0 5 . 6 4 1 0 0 . 0 0 1 4 2348.8033 0 . 0 0 0 4 3 . 3 2 8 6 0 . 3 0 0 4

1 1.3500 0.7407 1.0000 1.0000 0.7407 1.3500
2 1.8225 0.5487 2.3500 0.4255 1.2894 0.7755
3 2.4604 0.4064 4.1725 0.2397 1.6959 0.5897
4 3.3215 0.3011 6.6329 0.1508 1.9969 0.5008
5 4.4840 0.2230 9.9544 0.1005 2.2200 0.4505
6 6.0534 0 . 1 6 5 2 1 4 . 4 3 8 4 0 . 0 6 9 3 2 . 3 8 5 2 0 . 4 1 9 3
7 8.1722 0 . 1 2 2 4 2 0 . 4 9 1 9 0 . 0 4 8 8 2 . 5 0 7 5 0 . 3 9 8 8
8 11.0324 0 . 0 9 0 6 2 8 . 6 6 4 0 0 . 0 3 4 9 2 . 5 9 8 2 0 . 3 8 4 9
9 14.8937 0 . 0 6 7 1 3 9 . 6 9 6 4 0 . 0 2 5 2 2 . 6 6 5 3 0 . 3 7 5 2
10 20.1066 0 . 0 4 9 7 5 4 . 5 9 0 2 0 . 0 1 8 3 2 . 7 1 5 0 0 . 3 6 8 3
1 1 2 7 . 1 4 3 9 0.0368 74.6967 0 . 0 1 3 4 2 . 7 5 1 9 0 . 3 6 3 4
1 2 3 6 . 6 4 4 2 0.0273 101.8406 0 . 0 0 9 8 2 . 7 7 9 2 0 . 3 5 9 8
1 3 4 9 . 4 6 9 7 0.0202 138.4848 0 . 0 0 7 2 2 . 7 9 9 4 0 . 3 5 7 2
1 4 6 6 . 7 8 4 1 0.0150 187.9544 0 . 0 0 5 3 2 . 8 1 4 4 0 . 3 5 5 3
1 5 9 0 . 1 5 8 5 0.0111 254.7385 0 . 0 0 3 9 2 . 8 2 5 5 0 . 3 5 3 9
1 6 1 2 1 . 7 1 3 9 0 . 0 0 8 2 344.8970 0 . 0 0 2 9 2 . 8 3 3 7 0 . 3 5 2 9
1 7 1 6 4 . 3 1 3 8 0 . 0 0 6 1 466.6109 0 . 0 0 2 1 2 . 8 3 9 8 0 . 3 5 2 1
1 8 2 2 1 . 8 2 3 6 0 . 0 0 4 5 630.9247 0 . 0 0 1 6 2 . 8 4 4 3 0 . 3 5 1 6
1 9 2 9 9 . 4 6 1 9 0 . 0 0 3 3 852.7483 0 . 0 0 1 2 2 . 8 4 7 6 0 . 3 5 1 2
2 0 4 0 4 . 2 7 3 6 0 . 0 0 2 5 1152.2103 0 . 0 0 0 9 2 . 8 5 0 1 0 . 3 5 0 9
2 1 545.7693 0 . 0 0 1 8 1 5 5 6 . 4 8 3 8 0.0006 2 . 8 5 1 9 0 . 3 5 0 6
2 2 736.7886 0 . 0 0 1 4 2 1 0 2 . 2 5 3 2 0.0005 2 . 8 5 3 3 0 . 3 5 0 5
2 3 994.6646 0 . 0 0 1 0 2 8 3 9 . 0 4 1 8 0.0004 2 . 8 5 4 3 0 . 3 5 0 4
2 4 1342.7973 0 . 0 0 0 7 3 8 3 3 . 7 0 6 4 0.0003 2 . 8 5 5 0 0 . 3 5 0 3
I - Slide 54
2 5 1812.7763 0 . 0 0 0 6 5 1 7 6 . 5 0 3 7 0.0002 2 . 8 5 5 6 0 . 3 5 0 2

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Economic Analysis &

Life Cycle Costing

• Economic analysis involves formulating, estimating and

• Economic analysis forms the core methodology of making

30/01/2021 Energy Auditing and Energy Efficienc y

 The manifestationof the TIME VALUE OF MONEY is termed INTEREST,

It can save us an enormous amount of time in the procurement process

As an example, think of the price of a car. In 1980, a car would have

5. Net Present Value (NPV) - The difference between the

6. Internal Rate of Return (IRR) - The discount rate at which the

8. Minimum acceptable rate of return (MARR): The rate

8. Pay back period: is simply the number of years needed to

9. Salvage Value - the value of the equipment at the end of the

9. Life of the project (N) - the number of years that we will

 The concept of time value of money employs the following

 P Present worth, amount of money at the present

The most common engineering economy problems involve

 These receipts and disbursements in a given time interval are

Net cash flow = receipts – disbursements

 Since each receipts or disbursement takes place at a certain

30/01/2021 Energy Auditing and Energy Efficienc y

“A” represents an Annual cash flow. May be

F” represents a Future cash

What is the PV of $10,000 to be received 5 years in the

1) Single Payment Compound Amount Factor

SPCAF, or Compound Factor, Is Given the Notation

3) Uniform Series Present Worth Factor

4) Capital Recovery Factor

TO FIND THE ANNUAL AMOUNTS FOR ( N ) YEARS WHEN THE

5) Sinking Fund Factor

TO FIND THE EQUIVALENT ANNUAL AMOUNTS KNOWING A FUTURE

6) Uniform Series Compound Amount

TO FIND THE FUTURE WORTH KNOWING THE UNIFORM EQUAL

{( 1+ i ) n – 1 } / i Is the Uniform Series Compound Amount

Factors are tabulated in all Economy texts

If The Present Amount Pis IterestRate

Formula Excel Function

Equal Annual A/P 29,832 29,832 29,832 29,832 29,832 149,158

LE.100,000 is equivalent to LE.201,136 after 5 years if the

Cost you can afford = A (P/A, 15%,

A boiler economizer will cost $20,000 and last 5 years.

Find the savings (A) P=?

A company has asked you to look at two

We have two projects with the same lifespan, so we use

Solution: NPV1 = A (P/A, 12%, 8) - P Solution: NPV2 = A (P/A, 12%, 8) - P

NPV is higher for Project 2, so we would recommend it.

A company considers two projects. The first

Which project would you recommend?

We have two projects with different lifespans, so use Annual Value:

Savings (A) = $23,000/yr Savings (A) = $18,000/yr

A software system can coordinate your facility’s

We are asked to determine if this is a good project

30/01/2021 Energy Auditing and Energy Efficienc y

You should give yourself 15 minutes to answer all of

2. A heat wheel can be installed on an exhaust air system to

4. An automation system that will optimize many system functions for 8

A. $78,677, $58,251, standard compressor