Question: 3. The maintenance expense on a machine is expected to be $5,000 at the end of the first year and to increase $500 each year

3. The maintenance expense on a machine is expected to be $5,000 at the end of the first year and to increase $500 each year for the following ten years. Then at year 11, 12, 13 and 14 it will stay at the same level of the 10 year. Year 15; the increase will be $1000 for every year for the coming 7 years. What present sum of money should be set aside now to pay for the required maintenance expenses over the life period of that machine? (Assume 4% compound interest per year.) $105

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