8/9/2019 3 Arch 449 Chapter 3-1

1/32

 

1

20102011

8/9/2019 3 Arch 449 Chapter 3-1

2/32

  .

 

 ..

 

   

 

8/9/2019 3 Arch 449 Chapter 3-1

3/32

 A

 

 

 A :

  ; ( )

  ( )

  /

 

8/9/2019 3 Arch 449 Chapter 3-1

4/32

Why Is Engineering Economics Important?

• Engineers , Architects DESIGN things and performPROJECTS

4

• Therefore, engineers and Architects must be concerned with the

economic aspects of designs that they recommend, andprojects that they perform

8/9/2019 3 Arch 449 Chapter 3-1

5/32

 

 

5

  :   A:

  $18,000 ,

  $600 3

  ?

8/9/2019 3 Arch 449 Chapter 3-1

6/32

• It will help you make good decisions:

• In your professional life

6

•And in your personal life!

• Knowledge of engineering economics will

have a significant impact on you personally!

8/9/2019 3 Arch 449 Chapter 3-1

7/32

ENGINEERING ECONOMICS INVOLVES:

7

FORMULATING, ESTIMATING, ANDEVALUATING ECONOMIC OUTCOMES

WHEN CHOICES OR ALTERNATIVES AREAVAILABLE

8/9/2019 3 Arch 449 Chapter 3-1

8/32

BY USING SPECIFIC

MATHEMATICAL RELATIONSHIPS

8

TO COMPARE THE CASH FLOWS OF THEDIFFERENT ALTERNATIVES

8/9/2019 3 Arch 449 Chapter 3-1

9/32

8/9/2019 3 Arch 449 Chapter 3-1

10/32

 

  : $100 ,

 $100 ?

10

 

8/9/2019 3 Arch 449 Chapter 3-1

11/32

  ( )  

 

8/9/2019 3 Arch 449 Chapter 3-1

12/32

( ).

 

().

.

 

8/9/2019 3 Arch 449 Chapter 3-1

13/32

$$

Investment

Inflation

8/9/2019 3 Arch 449 Chapter 3-1

14/32

 

.  , % , $

( ) $

  . A, $ $. .

 , $. , $  , $

 

6%

14

8/9/2019 3 Arch 449 Chapter 3-1

15/32

  :

  : ( )

 :

Definitions

.     ( )

  : ,  (

)

8/9/2019 3 Arch 449 Chapter 3-1

16/32

   

 

Interest : used to move money through time forcomparisons. The rent  for loaned money (cost of

using money)

16

, .

 .

8/9/2019 3 Arch 449 Chapter 3-1

17/32

: $, 1,   $, .

 A.

 B. .

17

8/9/2019 3 Arch 449 Chapter 3-1

18/32

   

 

  

 

8/9/2019 3 Arch 449 Chapter 3-1

19/32

 

19

8/9/2019 3 Arch 449 Chapter 3-1

20/32

Type of Interest

Simple interest: the practice of chargingan interest rate only to an initial sum(principal amount).

Compound interest: the practice ofcharging an interest rate to an initial sumand to any previously accumulated interest

that has not been withdrawn.

8/9/2019 3 Arch 449 Chapter 3-1

21/32

Simple Interest

  P = Principal amount

  i = Interest rate

  N = Number of

End ofYear

Beginning

Balance

Interestearned

EndingBalance

interest periods Example:

  P = $1,000

  i = 10%

  N = 3 years

0 $1,000

1 $1,000 $100 $1,100

2 $1,100 $100 $1,200

3 $1,200 $100 $1,300

8/9/2019 3 Arch 449 Chapter 3-1

22/32

   

(.. ),

  .

22

8/9/2019 3 Arch 449 Chapter 3-1

23/32

/

.

Simple Interest

I = P * i * n

Ex. $ 1000 loan for 2 years at 10 % per year – nocompounding

I = P * i * n = 1000 * .10 * 2 = $200

Payback = F = P + I

= 1000 + 200 = $1200

8/9/2019 3 Arch 449 Chapter 3-1

24/32

Compound Interest

Compound interest: the practice ofcharging an interest rate to an initial sumand to any previously accumulated interest

that has not been withdrawn.

8/9/2019 3 Arch 449 Chapter 3-1

25/32

Compound Interest

  P = Principal amount

  i = Interest rate

  N = Number of

Endof

Year

BeginningBalance

Interestearned

EndingBalance

interest periods Example:

  P = $1,000

  i = 10%

  N = 3 years

0 $1,000

1 $1,000 $100 $1,100

2 $1,100 $110 $1,210

3 $1,210 $121 $1,331

8/9/2019 3 Arch 449 Chapter 3-1

26/32

 

.

 

 ,  .

 : $1,000 6%

, ?

26

8/9/2019 3 Arch 449 Chapter 3-1

27/32

Interest for Year 1 = $1,000 X 0.06 = $60

Total amount due after year 1 = $1,000 + $60 = $1,060

Interest for year 2 = $1,060 X 0.06 = $63.60

Total amount due after year 2 = $1,060 + $63,60 = $1,123.60

Interest for year 3 = $1,123.60 X 0.06 = $67.42Total amount due after year 3 = $1,123.60 + $67.42 = $1,191.02

27

, , $1,000 $1,191.02 $1,180 = $11.02   .

8/9/2019 3 Arch 449 Chapter 3-1

28/32

 ,

=0, ()

  :

28

8/9/2019 3 Arch 449 Chapter 3-1

29/32

 A ,  

(2)

1

  1 2.

29

8/9/2019 3 Arch 449 Chapter 3-1

30/32

  , 3

(3)   2 2 3.

30

8/9/2019 3 Arch 449 Chapter 3-1

31/32

  ,  

() ()  

 , () :

31

8/9/2019 3 Arch 449 Chapter 3-1

32/32

To avoid the trouble of writing out each formula, a

standard notation is used:

(X/Y, i%, n)

The first letter in the parentheses (X) represent whatyou “Want to find”, while the second letter (Y)

represents what is “Given”.

For example, F/P means “find F when given P”. The iis the interest rate in percent and n represents the

number of periods involved.

32