Interest factors are multiplicative numbers calculated from interest formulas for given interest rates and peri-ods. They are used to convert cash flows occurring at dif-ferent times to a common time. The functional formats used to represent these factors are taken from ANSI Z94, and they are summarized in Appendix B to this chapter.

__Compound Amount Factor__

In the formula for finding the future value of a sum of money with compound interest, the mathematical expres-sion (1 + *i* )* ^{N}* is referred to as the

*compound amount factor,*represented by the functional format (

*F*/

*P*,

*i*,

*N*). Thus,

*F *=* P*(*F*/*P*,* i*,* N*)

__Interest tables:__** **Values of the compound amount, pre-sent worth, and other factors that will be discussed shortly, are tabulated for a variety of interest rates and number of periods in most texts on engineering economy. Example tables are presented in Appendix C to this chap-ter. Although calculators and computers have greatly re-duced the need for such tables, they are often still useful for interpolations.

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