If the company used an interest rate of 12 per year in

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Reference no: EM13638203

The effort required to maintain a scanning electron microscope is known to increase by a fixed percentage each year. A high-tech equipment maintenance company has offered its services for a fee that includes automatic increases of 7% per year after year 1. A certain biotech company offered $75,000 as prepayment for a 3 year contract to take advantage of a temporary tax loophole. If the company used an interest rate of 12% per year in determining how much it should offer, what was the service fee amount that it assumed for year 1?

Reference no: EM13638203

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