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IE 34300
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Agostino Capponi
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# IE 343 Important Equations

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Purdue University

Industrial Engineering

IE 34300

Agostino Capponi

Fall

Description

Relationship between price D= a−p Take first derivative to find
and quantity: b max revenue (D=a/2b), set
second derivative to 0 to
assure it is a max-2b<0
Profit(D) =Total revenue-total cost For profit not to be always
negative, re quire that a-cv is
¿−bD + a(C D v) 2 F positive; negative profit is
called a loss
Find optimal level of demand D=(a-cv)/2b
Simple Interest Rates P(1+Ni)
Compound Interest Rate P(1+r/m)^N m=times per year interest is
compounded, N is the number
of periods
Effective interest rate i=amount repaid at the end of
the year/P
Future given annuity A(F/A, i,N) Long form F=A[(1+i)^N-1]/I;
called uniform series
compound amount factor
Annuity given future A=F(A/F,i,N) A=F*i/((1+i)^N-1)
Principal given annuity P=A(P/A,i,N) P=A[(1+i)^N-1]/(i(i+1)^N)
Deferred Annuity: principal A (1+i)N−J−1 P=A[(P/A,i,N-J)*(P/F,i,J)]
given annuity P= i[ N ]
1+i )
Deferred Annuity: Future A N−J
F= [1+i) −1 ]
given principal i
Present equivalent value P P
PW=W

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