Survey equipment is very expensive and become obsoletes

Reference no: EM13697421

Survey equipment is very expensive and become obsoletes and needs to be replaced every 5 years. Consider a new GPS system consisting of a base station ($18,968 today's cost), a rover ($7665 today's cost), and software ($3833 today's cost). If the survey firm can put $485 in the bank each month in a savings account that will earn 3% APR, compounded monthly, will they have enough money in the account at the end of 5 years to to cover the cost of the new equipment if the cost of the equipment will be 4% higher in 5 years when they want to purchase the new equipment?

Reference no: EM13697421

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