Value of the entire sequence of maintenance costs

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Your MARR is 10% per year. It is currently Year 0. Maintenance costs for a robot are $100 in Year 1, after which they go up by $10 per year, so they are $110 in Year 2, $120 in Year 3, etc. The last maintenance cost is incurred in Year 20.

a. Find the Year 20 (future) value of the entire sequence of maintenance costs from Year 1 to Year 20. Show your work.

Hint: This cash flow can be seen as an arithmetic gradient with G = 10 sitting on top of an annuity with A = 100.

Reference no: EM132231769

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