Problem 5 (7 points): What is the equivalent annual cost in years 1 through 12 of a contract that has a first cost of $69,000 in year 0 and annual costs of $15,000 in years 3 through 12? Use an interest rate of 8% per year. Hint: Which worth(that is present worth, future worth, or annual worth) should be applied for the given scenario? Solution: