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    Equivalent uniform annual cost

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    Your County is planning to build a park. The initial cost for the park will amount to $6,500,000. Annual maintenance and repairs will amount to:

    $25,000 for each of the first five years,

    $30,000 for each of the next ten years and,

    $35,000 for each of the next five years.

    In addition, a major overhaul costing $500,000 will be required at the end of the tenth year.

    a) Use a constant interest rate of 5% and determine the equivalent uniform annual cost for a 20-year period.

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    The solution explains how to calculate the equivalent uniform annual cost.