The annual worth for years 1 through infinity of $50,000 now, $10,000 per year in years 1 through 15, and $20,000 per year in years 16 through infinÂity at 10% per year is closest to:
(a) less than $16,900
(b) $16,958
(c) $17,395
(d) $19,575
Find PW in year 0 and then multiply by i
PW0 = 50,000 + 10,000(P/A,10%,15) + (20,000/0.10)(P/F,10%,15)
= 50,000 + 10,000(7.6061) + (20,000/0.10)(0.2394)
= $173,941
AW = 173,941(0.10)
= $17,394
Answer is (c) $17,395
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