EUAW of an Arithmetic Gradient

The EUAW of a gradient is calculated by equation 4.2a or expression 4.2b, where G is the gradient. The spreadsheet calculation is exactly as in Example 4.3.

An employee with an annual pay of $30,000 is told he is going to get an annual pay increase of $1,200 each year. The increase starts in the second year of his employment. What is the EUAW of his increase for the first five years at an assumed interest rate of 7%? From the interest rate tables, we can obtain A/G for i=7% and n=5 to be

Hence, EUAW

We can also use equation 4.2a:

The difference of 0.08% is due to the rounding in the table. We can also use the spreadsheet as in Example 4.3.

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Project Management Made Easy

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