Answer:
-$24,900
Explanation:
Solution
Given:
The annual payment is defined as:
A = F [i /(1 + i)^n -1
Where,
F = The sum of amount accumulated
i = The interest rate (annual)
n = the number of years
The standard notation equation becomes this
=A = F (A/F, i, n)
Now,
The annual payment is A = P [ i(1 + i)^n / (1 + i)^n -1
where
P = The present value,
i = The interest rate (annual)
n = the number of year
The standard notation equation becomes this
=A = P (A/P, i, n)
We recall that,
The first cost P is $84,000.
Now,
A = $13,000, S = $9,000, n = 10 years, and i = 8 %
Thus,
AW =- 84000 ( A/ P 8% 10 ) - 13000 + 9000 (A/F, 8%, 10)
=-84000 (0.149) - 13000 + 9000 (0.069)
= -$24,900
