5.24 Maintenance money for a new building has been sought. Mr. Kendall would like to make a donation to cover all future expected maintenance costs for the building. These maintenance costs are...

q5.24

Extracted text: 5.24 Maintenance money for a new building has been sought. Mr. Kendall would like to make a donation to cover all future expected maintenance costs for the building. These maintenance costs are expected to be $50,000 each year for the first 5 years, $70,000 each year for years 6 through 10, and $90,000 each year after that. (The building has an indefinite service life.) (a) If the money is placed in an account that will pay 13% interest compounded annually, how large should the gift be? (b) What is the equivalent annual maintenance cost over the infinite service life of the building?