heeelp Determine the uniform annual expenditure that would be equivalent to the
ID: 2901140 • Letter: H
Question
heeelp
Determine the uniform annual expenditure that would be equivalent to the fluctuating budget for a particular piece of machinery. During each of the first 5 years, $1,000 will be budgeted. During the second 5 years, the budget will be $1,500 each year. In addition, $3,500 will be budgeted for an overhaul of the machine at the end of the fourth year and another $3,500 for an overhaul at the end of the eighth year. The piece of equipment will be of no value at the end of the tenth year. Use an 8% per year interest rate.Explanation / Answer
SUM OF G.P
where
a=first term
l=last term
r =ratio
=(a-lr)/(1-r)
here,
a=A/1.08,l=A/1.08^10,r=1/1.08
so sum=(A/1.08-A/1.08^10*1/1.08)/(1-1/1.08)
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