The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through...

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through Year 4, and $4,400 in Year 5 through Year 9. Estimate the future value of the M&O cost (at t=9) with an interest rate of 11% per year.

Expert Solution

Year	Amount	× FVF	Future value
0
1	2,500	2.30454	5,761.34
2	2,500	2.07616	5,190.40
3	2,500	1.87041	4,676.04
4	2,500	1.68506	4,212.65
5	4,400	1.51807	6,679.51
6	4,400	1.36763	6,017.58
7	4,400	1.23210	5,421.24
8	4,400	1.11000	4,884.00
9	4,400	1.00000	4,400.00
Total			47,242.75

Answer is:

47,242.75

jeff jeffy answered 2 years ago

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