A company establishes an account to replace equipment at the end of 10 years estimated to cost $15,000. At the end of 4 years, management decided to replace the equipment after 9 years due to accelerated wear. The interest rate on the account is 6%.

a) Assuming payments to the account are made at the end of each year, what were the yearly payments during the first 4 years and during the last 5 years?

b) Assuming payments are made to the account yearly at the start of the first year and with a last payment at the end of year 10, what were the yearly payments during the first 4 years and during the last 5 years?

Question

A company establishes an account to replace equipment at the end of 10 years estimated to cost $15,000. At the end of 4 years, management decided to replace the equipment after 9 years due to accelerated wear. The interest rate on the account is 6%.

a) Assuming payments to the account are made at the end of each year, what were the yearly payments during the first 4 years and during the last 5 years?

b) Assuming payments are made to the account yearly at the start of the first year and with a last payment at the end of year 10, what were the yearly payments during the first 4 years and during the last 5 years?

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A company establishes an account to replace equipment at the end of 10 years estimated to cost $15,000. At the end of 4 years, management

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