Metalfab Pump and Filter, Inc. estimates that the cost of steel bodies for pressure valves will inÂcrease by $2 every 3 months. If the cost for the first quarter is expected to be $80, what is the present worth of the costs for a 3-year time period at an interest rate of 3% per quarter?
What will be an ideal response?
P = 80(P/A,3%,12) + 2(P/G,3%,12)
= 80(9.9540) + 2(51.2482)
= $898.82
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