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

Question #240598
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.
1
Expert's answer
2021-09-28T07:37:20-0400

Cc=Fc+Po,mC_c=F_c+P_{o,m}

Fc=initial debtF_c= initial \space debt

and 

po,m=A/ip_{o,m}=A/i

i=interest=8%i=interest =8\%

Po,m=2777777.778P_o,m=2777777.778


Cc=(25000×5)+2777777.778C_c=(25000\times5)+2777777.778


Cc=2902777.78 answerC_c=2902777.78\space answer

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