Question

The operating and maintenance expenses for a mining machine are expected to be $11,880 in the first year and increase by $864 per year during the 15-year life of the machine. What uniform series of payments would cover these expenses over the life of the machine

Answer 1

Answer:

The answer is "$\ 16,441$".

Explanation:

First-year operational and maintenance costs $= \ 11,880$.

Operating and repair costs increase inwards$=\ 864$ for the first year

N =15 years machine life

Interest $I = 10\%$annually combined

Please find the image file.

Its single payment sequence is now provided by:

$Amount=(\text{15-year system quantity})\times (\frac{\text{Rate of interest}}{(1-(1+ \text{Rate of interest})- n))}$

             $= \ 522,371.3236 \times (\frac{0.1}{(1-(1+0.1)-15)})$

Uniform payment sequence $=\ 16441.2477 \approx\ 16,441$