Engineering Board Exam Reviewer · Perpetuity and Capitalized Cost · hard
A bridge needs periodic replacement of a P400,000 component every 10 years, forever, at 6% interest. Find the present worth of all future replacements.
- P505,791.50
- P400,000.00
- P666,666.67
- P450,000.00
Answer
A. P505,791.50
Solution
PW= 400000(1.06)10-1 P505,791.50.
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