An annual maintenance cost of a generator is P1000 after one year and it is estimated to increase by 10% each year for the subsequent 7 years. Find the present worth of the maintenance cost if the rate of interest is 15% compounded annually.
An annual maintenance cost of a generator is P1000 after one year and it is estimated to increase by 10% each year for the subsequent 7 years. Find the present worth of the maintenance cost if the rate of interest is 15% compounded annually.
Chapter1: Making Economics Decisions
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![An annual maintenance cost of a generator is P1000 after one year and it is
estimated to increase by 10% each year for the subsequent 7 years. Find the present
worth of the maintenance cost if the rate of interest is 15% compounded annually.
ANSWER: P5985.1403
Geometric Gradient
Geometric Gradient - a series of payments but has common ratio on the succeeding payments.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffda66c9f-6a6b-498a-87b6-198146cc7b72%2F6b061e05-6514-4024-8f1a-ac31e7358c7f%2F07vvr1n_processed.png&w=3840&q=75)
Transcribed Image Text:An annual maintenance cost of a generator is P1000 after one year and it is
estimated to increase by 10% each year for the subsequent 7 years. Find the present
worth of the maintenance cost if the rate of interest is 15% compounded annually.
ANSWER: P5985.1403
Geometric Gradient
Geometric Gradient - a series of payments but has common ratio on the succeeding payments.
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