The maintenance expense on a machine is expected to be 52,000 during the first year and to increase $200 each year for the following five years. What present sum of money (approximately) should be set aside now to pay for the required maintenance expenses over the five-year period, (Assume 5% compound interest per year).  A 12.777 dollar B  10.306 dollar C  11.954 dollar D 13.601dollar

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
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QUESTION 4 1

. The maintenance expense on a machine is expected to be 52,000 during the first year and to increase $200 each year for the following five years. What present sum of money (approximately) should be set aside now to pay for the required maintenance expenses over the five-year period, (Assume 5% compound interest per year).


 A 12.777 dollar

B  10.306 dollar

C  11.954 dollar

D 13.601dollar

 

 

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