Solution: What is the approximate present worth of maintenance for the machine?

The maintenance cost for a sewing machine this year is expected to be P500. The cost will increase P50 each year for the subsequent 9 years. The interest is 8% compounded annually.

What is the approximate present worth of maintenance for the machine?

Problem Statement: EE Board April 1997

The maintenance cost for a sewing machine this year is expected to be P500. The cost will increase P50 each year for the subsequent 9 years. The interest is 8% compounded annually. What is the approximate present worth of maintenance for the machine over the full 10-year period?

  • A. P4,700
  • B. P5,300
  • C. P4,300
  • D. P5,500

Problem Answer:

The approximate present worth of maintenance for the machine is P4,700.

Solution:

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