Explain the problem with formulas and variables

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Question: The effort required to maintain a scanning electron microscope is known to increase by a ?xed percentage each year. A hightech equipment maintenance company has offered it services for a fee of $25,000 for the ? rst year (i.e., end of year 1) with increases of 6% per year thereafter. If a biotechnology company wants to pay for a 3-year contract up front to take advantage of a temporary tax loophole, how much should it be willing to pay if it uses an interest rate of 15% per year

Can you please explain this problem with formulas and variables?

Reference no: EM131969605

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