Uniform Series Involving F&A

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Presentation transcript:

Uniform Series Involving F&A These uniform series formulas involve F&A Cash Flow Diagrams Are As Follows: 1 2 3 4 5 F=? A=Given 1 2 3 4 5 F=Given A=? F=A(F/A,i,n) A=F(A/F,i,n) Note: F is in Same Period as Last A Standard Factor Notation is As follows:

Example – An Industrial Engineer made a slight modification to a chip manufacturing process which will save her company $10,000 per year. At an interest rate of 8 % per year, how much would the savings amount to in 7 years? A $45,300 B. $68,500 C. $89,228 D. $151,500 The cash flow diagram is as follows: A=10,000 F=? i=8% 0 1 2 3 4 5 6 7 F=10,000(F/A,8%,7) =10,000(8.9228) =$89,228 Answer is C