Chapter 8.8, Problem 82E

Capitalized Cost In Exercises 81 and 82, find the capitalized cost C of an asset (a) for n = 5 years, (b) for n = 10 years, and (c) forever. The capitalized cost is given by

$C=C_0+{\displaystyle \int \begin{array}{c}n\\ 0\end{array}c(t)e^{-rt}dt}$

where C₀ is the original investment, t is the time in years, r is the annual interest rate compounded continuously, and c(t) is the annual cost of maintenance.

$\begin{array}{l}C0=\$650,000\\ c(t)=\$25,000(1+0.08t)\\ r=0.06\end{array}$