A student bought $1000 worth of furniture. What is the equivalent annual cost if it is...

Question

Question

A student bought $1000 worth of furniture. What is the equivalent annual cost if it is expected to last 10 years and the interest-rate is 5%

Answer 1

Answer #1

Use the Formula to calculate the Equivalent annual cost(EAC) : NPV is net present worth.

here n=10, r=5% and NPV = $1000

So Equivalent annual cost of furniture is: $129.50

Answer 2

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