Maintenance money for an athletic complex has been sought. Mr. Kendall, the Athletic Director, would like to solicit a donation to cover all future expected maintenance costs for the building. These maintenance costs are expected to be $1.2 million each year for the first five years, $1.6 million each year for years 6 through 10, and $1.9 million each year after that. (The building has an indefinite service life.) If the money is placed in an account that will pay 7% interest compounded annually, how large should the gift be? Click the icon to view the interest factors for discrete compounding when i = 7% per year. The gift should be $31.35 million. (Round to two decimal places.) More Info N 1 Single Payment Compound Amount Factor (F/P, I, N) 1.0700 Present Worth Factor (P/F, I, N) 0.9346 Compound Amount Factor (F/A, I, N) 1.0000 Equal Payment Series Sinking Present Fund Worth Factor Factor (P/A, I, N) 0.9346 (A/F, I, N) 1.0000 Capital Recovery Factor (A/P, I, N) 1.0700 - X

Maintenance money for an athletic complex has been sought. Mr. Kendall, the Athletic Director, would like to solicit a donation to cover all future expected maintenance costs for the building. These maintenance costs are expected to be $1.2 million each year for the first five years, $1.6 million each year for years 6 through 10, and $1.9 million each year after that. (The building has an indefinite service life.) If the money is placed in an account that will pay 7% interest compounded annually, how large should the gift be? Click the icon to view the interest factors for discrete compounding when i = 7% per year. The gift should be $31.35 million. (Round to two decimal places.) More Info N 1 Single Payment Compound Amount Factor (F/P, I, N) 1.0700 Present Worth Factor (P/F, I, N) 0.9346 Compound Amount Factor (F/A, I, N) 1.0000 Equal Payment Series Sinking Present Fund Worth Factor Factor (P/A, I, N) 0.9346 (A/F, I, N) 1.0000 Capital Recovery Factor (A/P, I, N) 1.0700 - X

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Maintenance money for an athletic complex has been sought. Mr. Kendall, the Athletic Director, would like to solicit a donation to cover all future expected maintenance costs for the building.
These maintenance costs are expected to be $1.2 million each year for the first five years, $1.6 million each year for years 6 through 10, and $1.9 million each year after that. (The building has an
indefinite service life.)
If the money is placed in an account that will pay 7% interest compounded annually, how large should the gift be?
Click the icon to view the interest factors for discrete compounding when i = 7% per year.
The gift should be $31.35 million. (Round to two decimal places.
More Info
N
1
2
3
4
5
67899
10
Single Payment
Compound
Amount
Factor
(F/P, I, N)
1.0700
1.1449
1.2250
1.3108
1.4026
1.5007
1.6058
1.7182
1.8385
1.9672
Present
Worth
Factor
(P/F, I, N)
0.9346
0.8734
0.8163
0.7629
0.7130
0.6663
0.6227
0.5820
0.5439
0.5083
Print
Compound
Amount
Factor
(F/A, I, N)
1.0000
2.0700
3.2149
4.4399
5.7507
7.1533
8.6540
10.2598
11.9780
13.8164
Equal Payment Series
Sinking Present
Fund
Worth
Factor
(A/F, I, N)
Factor
(P/A, I, N)
1.0000
0.9346
0.4831
1.8080
0.3111
2.6243
0.2252
3.3872
0.1739
4.1002
0.1398
0.1156
0.0975
0.0835
0.0724
Done
4.7665
5.3893
5.9713
6.5152
7.0236
Capital
Recovery
Factor
(A/P, i, N)
1.0700
0.5531
0.3811
0.2952
0.2439
0.2098
0.1856
0.1675
0.1535
0.1424
X

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