PgivenA1: Present value for geometric gradient series (Engineering...

In iemisc: Irucka Embry's Miscellaneous Functions

Present value for geometric gradient series (Engineering Economics)

Description

Compute P given A1

Usage

PgivenA1(A1, i, f, n)

Arguments

A1	numeric vector that contains the initial annual value(s)
i	numeric vector that contains the interest rate(s) as a percent
f	numeric vector that contains the average interest rate value(s) as a percent per period
n	numeric vector that contains the period value(s)

Details

P is expressed as

P = \frac{A_1\left[1 - \left(1 + i\right)^{-n}\left(1 + f\right)^{n}\right]}{i - f}, \: where \: f \neq i

or

P = A_1n\left(1 + i\right)^{-1}, \: where \: f = i

P

"the present equivalent of the geometric gradient series"

A_1

"the initial cash flow in that occurs at the end of period one"

i

the "interest rate per period"

f

the "average rate each period"

n

the "number of interest periods"

Note: "f can be positive or negative"

Value

PgivenA1 numeric vector that contains the present value(s) rounded to 2 decimal places

Author(s)

Irucka Embry

References

William G. Sullivan, Elin M. Wicks, and C. Patrick Koelling, Engineering Economy, Fourteenth Edition, Upper Saddle River, New Jersey: Pearson/Prentice Hall, 2009, page 156-159.

Examples

library(iemisc)

# Example 4-23 from the Reference text (page 158-159)
PgivenA1(A1 = 1000, i = 25, f = 20, n = 4) # i is 25\% and f is 20\%


# Example 4-24 from the Reference text (page 159)
PgivenA1(A1 = 1000, i = 25, f = -20, n = 4) # i is 25\% and f is -20\%

iemisc documentation built on Sept. 25, 2023, 5:09 p.m.