Engineering Economy – Problem 2.35

Determine the difference in the present worth values of the following two commodity contracts at an interest rate of 8% per year.

Contract 1 has a cost of $10,000 in year 1; costs will escalate at a rate of 4% per year for 10 years.
Contract 2 has the same cost in year 1, but costs will escalate at 6% per year for 11 years.

Sample problems and notes are based on the following textbook: Engineering Economy 7th Edition

ISBN-13: 978-0073376301

ISBN-10: 0073376302

Edition: 7

Author: Leland BlankAnthony Tarquin 

Published Date: 2011

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