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ENGINEERING ECONOMICS Refers to those aspects of economics and its tools of analysis most relevant to the Engineer’s decision making process. https://www.smartcapitalmind.com/what-isengineering-economics.htm MONEY AND INTEREST CHAPTER 1 Cont. MONEY DEFINED AS ANY ARTICLE OR SUBSTANCE USED AS A MEDIUM OF EXCHANGE, MEANS OF PAYMENT OR MEANS OF WEALTH TYPES OF MONEY
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Interest, I 𝐼 = 𝑃𝑖𝑛
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Future Worth, F 𝐹 =𝑃+𝐼 𝐹 = 𝑃 1 + 𝑖𝑛
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Where; I, Interest i, interest rate n, number of interest periods in a year a. Ordinary Simple Interest is computed on the basis of 12 months of 30 days each or 360 days a year.
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FIAT MONEY 2. COMMODITY MONEY 3. REPRESENTATIVE MONEY 4. CREDIT MONEY
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INTEREST IS THE AMOUNT OF MONEY PAID FOR THE USE OF BORROWED CAPITAL OR THE INCOME PRODUCED BY MONEY WHICH HAS BEEN LOANED.
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Study Notes
Engineering Economics and Money & Interest
- Engineering economics focuses on economic aspects relevant to engineers' decision-making process
- Money is defined as any substance used as a medium of exchange, payment, or wealth
- Types of money include fiat money, commodity money, representative money, and credit money
- Interest is the amount paid for borrowed capital or the income from loaned money
- Methods of computing interest include simple interest
- Simple interest is calculated using the principal only, ignoring any accrued interest
- The formula for simple interest is I = P * i * n and Future Worth, F = P + I
- Ordinary simple interest is computed based on 12 months of 30 days each or 360 days a year
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Description
Test your knowledge of engineering economics and money and interest concepts with this quiz. Explore the definition and types of money, and delve into the relevance of economics in engineering decision-making.
