Chapter 6.4, Problem 42E

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10th Edition

Ron Larson

ISBN: 9781305860919

Textbook Problem

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**Capitalized Cost** In Exercises 39-42, the capitalized cost C of an asset is given by where
*t* is the time in years, *r* is the annual interest rate (in

*c(t*) is the annual cost of maintenance (in dollars). Find the capitalized cost of an asset (a) for 5 years, (b) for 10 years, and (c) forever.

**(a)**

To determine

**To calculate:** The capitalized cost of asset for

Here,

Explanation

**Given Information:**

The original investment

**Formula used:**

The integral of an exponential is:

Here,

**Calculation:**

Recall the expression of capitalized cost of asset.

Convert

Substitute

Now, consider the integral and solve separately.

Assume

Integrate,

**(b)**

To determine

**To calculate:** The capitalized cost of asset for

Here,

**(c)**

To determine

**To calculate:** The capitalized cost of asset for forever. If the capitalized cost is given by:

Here,

Sect-6.1 P-1CPSect-6.1 P-2CPSect-6.1 P-3CPSect-6.1 P-4CPSect-6.1 P-5CPSect-6.1 P-6CPSect-6.1 P-7CPSect-6.1 P-1SWUSect-6.1 P-2SWUSect-6.1 P-3SWU

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