The costs of fuel for a smelting operation are expected to be $50,000 in year three, $52,500

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Question:

The costs of fuel for a smelting operation are expected to be $50,000 in year three, $52,500 in year four and amounts increasing by 5% per year thereafter through year ten. At an interest rate of 8% per year, the present worth of the fuel cost is nearest to:

A) $190,400

B) $204,600

C) 277,900

D) $336,300