×
INTELLIGENT WORK FORUMS
FOR ENGINEERING PROFESSIONALS

Log In

Come Join Us!

Are you an
Engineering professional?
Join Eng-Tips Forums!
  • Talk With Other Members
  • Be Notified Of Responses
    To Your Posts
  • Keyword Search
  • One-Click Access To Your
    Favorite Forums
  • Automated Signatures
    On Your Posts
  • Best Of All, It's Free!
  • Students Click Here

*Eng-Tips's functionality depends on members receiving e-mail. By joining you are opting in to receive e-mail.

Posting Guidelines

Promoting, selling, recruiting, coursework and thesis posting is forbidden.

Students Click Here

Jobs

Industrial Engineers - What do I use for "i"

Industrial Engineers - What do I use for "i"

Industrial Engineers - What do I use for "i"

(OP)
When I took Engineering Economic Analysis in college, for every problem they gave you the value to use for the interest i (usually 10%). I was somewhat surprised by this because this value is so critical in solving the problem.

So how do I know what to use for i?

Thanks.

RE: Industrial Engineers - What do I use for "i"

Well, the proper value for 'i' is always a very touchy topic.  An (overly) simplified method is to look at your next best alternative rates available.  In other words, are you *borrowing* money? - -then use the rates that you get from your financing institution(s).  Or are you looking at value of doing a project? - -Then you may be looking at the best rates you could get by *investing* your money (rather than doing the project).  For a more in-depth analysis, review with your finance managers.

Curmudgeon

RE: Industrial Engineers - What do I use for "i"

Use the best rate that you can get in the market if you were to invest your money in a CD for example.

RE: Industrial Engineers - What do I use for "i"

One thing that you have to remember.....school vs. the real world analysis.  Thats why you get paid to bucks, that sometimes means you being able to do the research for the results that you want.

RE: Industrial Engineers - What do I use for "i"

If this is a personal question, the i you need is the interest rate you are paying on your most expensive credit card, or the rate you expect to make on your best investment.  

Red Flag This Post

Please let us know here why this post is inappropriate. Reasons such as off-topic, duplicates, flames, illegal, vulgar, or students posting their homework.

Red Flag Submitted

Thank you for helping keep Eng-Tips Forums free from inappropriate posts.
The Eng-Tips staff will check this out and take appropriate action.

Reply To This Thread

Posting in the Eng-Tips forums is a member-only feature.

Click Here to join Eng-Tips and talk with other members!


Resources