THE EQUATION OF MONEY Let e(n =the amount of money available at the beginning of the nth year F(n=the amount of money paid in at the end of the nth Jy ear i= the interest rate Then, the equation of Money is Q(n+1)=(1+i)Qm)+F(m),n=0,…,N Note: g(0=the initial payment 10/1599 Engineering economics 110/15/99 Engineering Economics 1 7 THE EQUATION OF MONEY Let Q(n )= the amount of money available at the beginning of the nth year F(n) = the amount of money paid in at the end of the nth year i = the interest rate Then, the Equation of Money is Q(n+1) = (1+i) Q(n ) + F(n ), n = 0, …, N Note: Q(0) = the initial payment