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# The maintenance cost for an investment is \$2,000 per year for the first 10 years and \$1,000 per year thereafter. The investment has infinite life.

The maintenance cost for an investment is \$2,000 per year for the first 10 years and \$1,000 per year thereafter. The investment has infinite life. With a 10% interest rate, what is the present worth of the annual disbursements? The answer is \$16,144.60. How do we get this?

SOLUTION:
Present Value of \$2,000 per year:
PMT
Future Value
Rate
Nper \$2,000.00
\$10.00%
10.00 Using excel formula,
Present Value \$12,289.13 Present Value of \$1,000 = (\$1,000 / 10%) * PVF @ 10%, 10...

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