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Engineering Economics: Converting a NFW to an AEW (future worth)

  1. Oct 14, 2016 #1
    given a net future worth of $72700 after 5 years at 10% interest is it possible to convert it to an annual equivalent worth that is 20 years at 10% interest?
     
  2. jcsd
  3. Oct 14, 2016 #2

    JBA

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    If you are asking what the value of $72700 will be in 15 years from that date simply google "calculate compounding interest".
     
  4. Oct 14, 2016 #3
    I have $72700 worth of Future worth and I want to convert it in an annuity factor that is 20 years I have already found the compounded interest. I just want to know given Net present worth can I convert it into annual equivalent worth.
     
  5. Oct 15, 2016 #4
    Sure. If you have a net present value of X, what annual payout can you take at 10% interest so that at the end of 20 years, all the principal is consumed? This is the same as an annuity of X at 10% interest for 20 years of payments.
     
  6. Oct 15, 2016 #5

    berkeman

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    Staff: Mentor

    Is this a schoolwork question?
     
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