Analogy in contemporary engineering economy: Mortgage loan and bond pricing

Two topics of social relevance, mortgage loan and bond pricing, have not received sufficient attention in engineering economy, though they are of considerable importance in real estate and corporate finance. In this paper we discuss some fundamentals for both topics using the basic TVM (Time-Value-Money) and NPV (Net-Present-Value) principles, and derive the closed form equations and iterative forms and their equivalence. Drawing upon an analogy between the computations for mortgage and bond, we apply cognitive modeling for problem solving using a financial calculator as an effective engineering tool.