Engineering Economy Formula Quick
Reference Guide
Subject: Engineering Economy (Civil Engineering)
Purpose: Comprehensive formula cheat sheet for economic analysis, equivalence calculations,
interest factors, and cost evaluation models.
Variable & Symbol Legend
Symbol
Description
Present Worth / Principal Value
Future Worth / Accumulated Amount
Uniform Periodic Payment / Annuity
Total Interest Amount (
)
Interest Rate per Compounding Period
Effective Annual Interest Rate
Stated Nominal Annual Interest Rate
Number of Compounding Periods per Year
Total Number of Compounding / Payment
Periods
Time in Years
Arithmetic Gradient Step Amount
Geometric Growth Rate per Period
Fixed Cost
Total Variable Cost (
Unit Variable Cost
Selling Price per Unit
Production Volume or Quantity
Total Life-Cycle Cost
Initial Cost / Capital Investment
Salvage Value / Terminal Value
1. Simple Interest Formulas
Used when interest is calculated only on the initial principal amount for each period.
● Ordinary Simple Interest (Uses 360-day standard year):
● Exact Simple Interest (Uses 365-day calendar year, 366 for leap years):
● Total Future Value (
):
)
2. Compound Interest & Single Payment Factors
Used when interest earned in each period is added to the principal for calculating future
interest.
● Single Payment Compound Amount Factor (Find
● Single Payment Present Worth Factor (Find
given
given
):
3. Nominal vs. Effective Interest Rates
● Interest Rate per Compounding Period ( ):
● Total Compounding Periods (
● Effective Annual Interest Rate (
● Continuous Compounding:
):
):
):
4. Uniform Series (Annuities)
Annuities are series of equal payments (
) occurring at equal time intervals.
A. Ordinary Annuity (Payments at the END of each period)
● Uniform Series Compound Amount Factor (Find
● Sinking Fund Factor (Find
given
):
● Uniform Series Present Worth Factor (Find
● Capital Recovery Factor (Find
given
given
given
):
):
B. Special Annuity Types
● Annuity Due (Payments at the BEGINNING of each period):
):
● Deferred Annuity (First payment delayed by
periods):
● Perpetuity (Continuous uniform payments lasting indefinitely,
):
5. Gradient Series
A. Arithmetic Gradient Series
Cash flows increase or decrease by a constant amount
● Present Worth of Arithmetic Gradient (
● Total Present Value (
each period.
):
):
B. Geometric Gradient Series
Cash flows increase or decrease by a constant percentage rate
● If
:
per period.
● If
:
6. Cost Concepts, Life-Cycle Cost & Break-Even
Analysis
● Total Production Cost (
● Total Revenue (
):
):
● Break-Even Volume (
):
Set
● Life-Cycle Cost (
):
(Where
= First/Acquisition Cost,
Repairs,
= Disposal Cost,
= Operations & Maintenance,
= Salvage Value)
= Major
7. Asset Depreciation Methods
● Straight-Line Depreciation (
● Book Value at Year
(
):
):
0