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Opinions and Queries

9th September 1955
Page 51
Page 51, 9th September 1955 — Opinions and Queries
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Which of the following most accurately describes the problem?

Australian Interest in Costing

WITH reference to the article by S. I .R., Don't " Forget Interest," in your issue dated February 25, I am interested to follow through the basic thinking The actual calculation of the' interest and the workings of the formula are apparent, but I am not clear

[I can best answer this correspondent's letter by giving a full _description of how to arrive at the formula. Let P represent the actual amonnt invested in the vehicle, C the rate of interest on both capital SUIT] and sinking fund, and L the number of years which it is anticipated the vehicle will run before' it tunSt be replaced. During the first year the sinking fund it assumed to be accumulating but bringing in no interest. The amount of interest to be debited against the operating cost

At the end of the first year an amount will have accu mulated on account of the sinking fund. During the second year that will bring in interest to the amount of C P 100 L so that the amount to be debited during the

This, by a simple mathematical calculation, can be shown to be equivalent to an average amount for interest of C -I1 PC

-X and that is the formula which can he 200 used as a means for assessing the interest,, to be debited each year against the vehicle.

Take as an examfffe a vehicle costing in the first place £1,000, the rate of interest 5 per cent., and the period of life of the vehicle five years. In these circumstances . 5+1 . 1,000 x 5 the formula becomes x which is 5 200

equivalent to 130 as against a normal figure of ,:£50, the amount which would have to be debited if interest was to be calculated' oh the straightforward 5 per cent. and no provision mad6, for the accurnulating interest

.. on the sinking fund.

Bear MEnd that his formula can be app] e'd Autry if a sinking fund is provided—S.T.R.I

Ignition Setting for Premium Fuels'

I AGREE' with your leading article of August 12 that I it is now possible Unintentionally to advance -excessively the ignition of a petrdl engine—due to the antiknock properties of premium grade fuels—and that care must be exercised in the adjustment of the timing so as to obtain the 'maximum benefit from these grades.

The best method that I have found of determining the most suitable setting is tp drain-the petrol tank of all premium fuel and refill with sufficient commercialgrade spirit for a test run. When the engine has warmed up to its normal operating temperature the vehicle should be driven up a fairly steep hill at .about 30-35 m.p.h. in top gear.

As the speed falls to 23-25 m.p.h. " pinking " should occur, becoming more pronounced when 18-20 m.p.h. Is reached. If it does not occur at these speeds the ignition timing needs advancing to create such a condition. The setting thus arrived at will be approximately correct for the use of premium-grade fuels.

The speeds given will, of course, vary to some extent according to the type of vehicle and its rear-axle ratio, but they apply to most commercial models up to 5 tons.

For static adjustment, the average increase varies from 4 to 5 degrees for light cornimercials, and 110 lii degrees for 2to 5-tonners before TD.C., in excess of the setting for the lower-grade spirit. It is to be understood -that the vehicles are in good condition. - Birmingham. 14 J. B. Gums.

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Locations: Birmingham

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