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aThe owner of the quarry signs a contract to sell his stone on the following basis. The purchaser is to remove the stone from the certain portion of the pit according to a fixed schedule of volume. price and time. The contract is to run 18 years as follows. Eight years excavating a total of 20,000 per year at P10 per meter, the remaining ten years, excavating a total of 50, 0 m per year at P15 per meter . On the basis of equal year-end payments during each period by the purchaser, what is the present worth of the pit to the owner on the basis of 15 % interest ?
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