Engineering Board Exam Reviewer · Uniform Gradient Series · medium
A cost is P10,000 at the end of year 1 and increases by 5% each year for 5 years. Find the present worth at 10% interest.
- P41,338.77
- P37,907.87
- P55,250.28
- P41,505.91
Answer
D. P41,505.91
Solution
For a geometric gradient with i g: P=A1 1-≤ft(1+g/1+i )ni-g=10,000·1-(1.05/1.10)5/0.10-0.05=P41,505.91.
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