A quadrupole mass spectrometer can be purchased today for $85,000. The owner of a mineral analysis laboratory expects the cost to increase exactly by the specialty laboratory equipment cost index over...

A quadrupole mass spectrometer can be purchased

today for $85,000. The owner of a mineral analysis

laboratory expects the cost to increase exactly by

the specialty laboratory equipment cost index over

the next 10 years. (a) If the specialty equipment inflation

rate is estimated to be 2% per year for the

next 3 years and 5% per year thereafter, how much

will the spectrometer cost in 10 years? (b) If the applicable

cost index is 1203 now, what will the index

be 10 years from now at the expected inflation rates?