Civil Engineering - Engineering Economy - Discussion

Discussion :: Engineering Economy - Section 1 (Q.No.33)


If P is principal amount, i is the rate of interest and n is the number of periods in years, then the interest factor is :

[A]. (1 + ni)
[B]. (ni - 1)
[C]. ni
[D]. None of these

Answer: Option A


No answer description available for this question.

Hister said: (Aug 5, 2021)  
Can anyone explain this?

Vaxoo said: (Jun 15, 2022)  
If P is the principal then the simple compound after the first year(A)=P+P*i*n.(can also be written as P(1+i*n).

Now, the interest factor simply is by how many times folds the principal has increased.

So, the principal has been increased by A/P =[P(1+ni)]/P =(1+ni).

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