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Question 1: The Highway Department expects the cost of maintenance for a piece of heavy construction equipment to be $5,000 in year 1, then increase to be $5,500 in year 2, and to increase annually by $500 through year 10. At interest rate of 10% per year determine the present worth of 10 years of maintenance costs.
Question 2: Ryan Borrowed $15,000 now with a 7% interest rate compounded annually. He needs to pay them back over 7 years starting from the end of the first year, what will be Ryan's annuity assuming that he will miss the 4th payment
Question 3: Engineering company just purchased a new CAD software for $8,000 now and annual payments of $500 per year for 6 years starting 2 years from now for annual upgrades. What is the present worth of the payments if the interest rate is 6% per year?
This document contains various important questions and their appropriate answers in the subject field of Economics.
Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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