The Uniform Gradient Present Worth (UGPW) calculator computes the Uniform Gradient Present Worth factor based on the interest rate and number of cash flow periods.
INSTRUCTIONS: Enter the following:
- i% - interest rate per period
- n - number of periods (e.g. cash flow periods)
Uniform Gradient Present Worth (UGPW): The calculator returns the UGPW factor as a real number.
The Math / Science
The UGPW is a Discrete Compounding Discount Factor. The formula for Uniform Gradient Present Worth is:
`UGPW =((1+i)^n-1)/(i^2(1+i)^n) - n/i`
where:
- UGPW is the Uniform Gradient Present Worth factor
- i is the interest rate
- n is the number of cash flow periods.
This equation calculates the Uniform Gradient Present Worth (UGPW) discount factor. It is a popular equation in engineering economics.
The uniform gradient present worth, UGPW, is a Discrete Compounding Discount factor.
This discount factor is used to calculate the present worth of the future value of a cash flow changing by a uniform gradient.
Present value = Future value * discount factor.
Present and Future Worth Calculators
- (SPCA) Single Payment Compound Amount Factor
- (USSF) Uniform Series Sinking Fund Factor
- (SPPW) Single Payment Present Worth Factor
- (UGFW) Uniform Gradient Future Worth Factor
- (UGPW) Uniform Gradient Present Worth Factor
- (UGUS) Uniform Gradient Uniform Series Factor
- (USCA) Uniform Series Compound Amount Factor
- (USPW) Uniform Series Present Worth Factor
EXAMPLE
The discount factor computed from a uniformly increasing cash flow over a period of n = 5 compounding periods at an interest rate of i =6.5% would be approximately: 7.789
REFERENCE
- Lindeburg, Michael R (1992). Engineer In Training Reference Manual. Professional Publication, Inc. 8th Edition.