4) Maintenance costs for a new bridge with an expected 50-year life are estimated to be $1,000 each year for the first 5 years, followed by a $10,000 expenditure in the fifteenth year and a $10,000 expenditure in year 30

Economics Dec 02, 2020

4) Maintenance costs for a new bridge with an expected 50-year life are estimated to be $1,000 each year for the first 5 years, followed by a $10,000 expenditure in the fifteenth year and a $10,000 expenditure in year 30. If i = 10% per year, what is the equivalent uniform annual cost over the entire 50-year-period? 5),6) What yearly deposits would be equivalent to a deposit of 600 TL every 6 months for 2 years if the interest rate is 24% per year compounded quarterly?

Expert Solution

The answer of the following question is given below in a detailed manner as follows:

Ans.1)

P0 = $1000 (P/A, 10%, 5) + $10,000 (P/F, 10%,15)

+ $10,000 (P/F, 10%, 30)

= $1000 (3.7908) + $10,000 (0.239392)

+ $10,000 (0.057309)

= $6,757.79

A = P₀ (A/P, 10%, 50)

= $6,757.79 (0.100859)

= $678.01

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