Answer to Question #240598 in Civil and Environmental Engineering for Alan Enrico V Tuib

Question

The first-year maintenance cost for a new car is estimated to be $150, and it increases at a uniform rate
of 15%per year. Using an 8%interest rate, calculate the present worth (PW) of the cost of the first 5
years of maintenance.

Answer 1

$C_c=F_c+P_{o,m}$

$F_c= initial \space debt$

and 

$p_{o,m}=A/i$

$i=interest =8\%$

$P_o,m=2777777.778$

$C_c=(25000\times5)+2777777.778$

$C_c=2902777.78\space answer$