China
Africa
Explore chapters and articles related to this topic
Evaluating Project Financial Potential
Published in Neil Petchers, Combined Heating, Cooling & Power Handbook: Technologies & Applications, 2020
In order to perform a PV calculation for a uniform series of annual cash flows, inflation should be taken into account when calculating the benefits, costs, and the discount rate or cost of capital. One way to do this is to use an effective interest rate that reflects the combination of inflation and interest rate. The effective interest rate can be calculated as: () ieff=1+i1+inf−1=i−inf1+inf
Engineering Economics
Published in Quamrul H. Mazumder, Introduction to Engineering, 2018
Effective interest rate: An effective interest rate i is a rate wherein the compounding of interest is taken into account. Effective rates are commonly expressed on an annual basis as an effective annual rate; however, any time basis may be used: Effectiveratepercompoundingperiod=r%pertimeperiodimcompoundingperiodsperi=rm
General introduction
Published in Adedeji B. Badiru, Handbook of Industrial and Systems Engineering, 2013
The compounding period can make a big difference in total payments or effective interest rate. In regular home mortgage, annual percentage rate (APR) could be significantly lower than the actual or effective interest rate charged on the loan based on the compounding period. Compounding more frequently means higher effective interest rate. Table 30.1 shows the actual or effective interest rate of 12% APR for different compounding periods.
Thermal-economic optimisation of a CHP gas turbine system by applying a fit-problem genetic algorithm
Published in International Journal of Sustainable Energy, 2018
Ana C. M. Ferreira, Senhorinha F. C. F. Teixeira, Rui G. Silva, Ângela M. Silva
The system investment cost is annualised, which corresponds to spreading of the initial cost through the lifetime of a system, considering the time value of the money. The initial capital cost is calculated as if a loan at a particular interest of discount rate is paid off over the lifetime expectancy. Equal amounts of n cash transactions for the investment can be expressed as capital recovery factor (CRF) calculated according to:where P denotes the present value of the initial cost; A represents a series of equal amount cash transactions (i.e. the annuity); ie is the effective interest rate; and n corresponds to the number of estimated years for the system lifetime. In this specific study, the system lifetime corresponds to a period of 15 years. According to the literature, usually, the manufacturers of micro-gas turbines claim that, after a period of 40,000 h, the replacement of several mechanical components of the power head is recommended, mainly the main rotating parts such as the turbine and compressor rotors (Pilavachi 2002).