Materials cost for a product are expected to be $460,000 per year beginning toda

Question

                    Materials cost for a product are expected to be $460,000 per year beginning today and continuing over the next 8 years, and maintenance costs are expected to                     increase by $2,500 each year after the first. If the annual operator salary of $ 42,000 increases by 3% each succeeding year, at an interest rate of 4% per year,                     estimate how much money would need to be banked now to run the operation through Year 8.
                

                                     Please show ALL work and answer all parts of the question. 5 stars will be given to whoever answers completely and correctly. Thanks!

Explanation / Answer

Let:

Mn: Materials cost year n ($)

Nn: Maintenance costs year n ($)

Sn: Operator salary year n ($)

i: Operator salary increase per year (%)

Tn: Total operating costs year n ($)?Tn=Mn+Nn+Sn

r: Interest rate per year (%)

I: Inversion ($)

The problem says:

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