Abstract
The purpose of this chapter is to familiarize you with the concept of interest rate (or the time value of money) and then give you the capability to manage simple but engaging decision-alternative problems related to real-life situations and process engineering. We will keep it simple in terms of economic concepts, but you will be considering interesting situations from everyday life and, additionally, stimulating and thought-provoking problems related to chemical and bioprocess engineering. We will continue learning about and engaging with the broad field of process and bioprocess engineering. Through the problems in the chapter, you will become familiar with various options for loans and how to compare them and improve your behavior as a rational consumer. The core of this chapter will focus on problems where you, as an engineer, need to compare different alternatives and make decisions mainly based on economic considerations. You will encounter questions where your technical expertise and knowledge of economics will be challenged to compare, for example, proposals from two or more companies to replace reactors at a processing plant. At this stage the problems will focus on economic analysis. For us, though, as future process and bioprocess engineers, the technical aspects of the project are more relevant, so we will leave this matter for future courses.
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