Citation Hunt

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In addition, N is the planned life of the project, i the interest rate, and n the year in which a particular OC or LP or RC is taking place. The interest rate (i) is used to convert expenses from different years to their present value (a method widely used by banks and insurance companies) so they can be added and compared fairly. The usage of the sum formula ( ${\textstyle \sum }$ ) captures the fact that expenses over the lifetime of a project must be cumulated after they are corrected for interest rate.^{[citation needed]}

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