1. Read above informations carefully. Carmina Manufacturing Company has $55000 in its bank account now. Company manager decides to spend this amount of money for only the maintenance cost of a strategic machine in its plant. Maintenance expense on this machine is expected to be $5000 during the first year and to increase $500 each year for the following ten years. Market interest rate is compounded annually and determined according to following function. Solve the following questions.

i=X+1, if 0X2X , if 3X6X-1 , if 7X9, X=8

1. What is the present sum of all maintenance expenses? (40p)
2. Is the money in its bank account enough to meet all maintenance expenses? (40p)
3. What do you think if the market interest rate increases by 5%? Do you think is it enough to meet all maintenance expenses now? (20p)