Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The company you work for assumes that a piece of equipment will need to be replaced in 10 years. They assume the replacement will be

The company you work for assumes that a piece of equipment will need to be replaced in 10 years. They assume the replacement will be $75,000. The company plans to put $20,000 in an account today and then make annual payments for the next ten years. How much will they need to put away each year, assuming a 5% annual interest rate?



Step by Step Solution

3.34 Rating (157 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the annual payment required we can use the present value of an annuity formula The pres... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Engineering Economics

Authors: Chan S. Park

5th edition

136118488, 978-8120342095, 8120342097, 978-0136118480

More Books

Students also viewed these General Management questions

Question

What are the building blocks of a sequence diagram?

Answered: 1 week ago

Question

1. What are differences between the terms sex and gender?

Answered: 1 week ago