Please help by answering this correctly. and also please explain. Sweepstakes. Y

Question

Please help by answering this correctly. and also please explain.

Sweepstakes. Your prize will be paid in Question 2 [4 points]. Congratulations! You are the latest winner of the two installments. You will receive the first payment, of $5,000, today ana the second payment, of $8,00,0 at the end of year 6. You will deposit this money, at the time each is received (now and at the end of year 6), into a savings account that will earn 10% interest. If you want to withdraw some amount "C" at the end of each year for the first six years and then "C+$500" each year for the next six years (i.e. years 7-12), find the value of C so that the total amount withdrawn equals the total amount deposited Question 3 [4 points]. In addition to hiring new employees to manage increasing demand for your company's mowing services, you also need to purchase some new equipment. You've identified a new eco-friendly electric riding mower that you think would meet all of your needs. Two years of maintenance are included in the purchase cost of the mower You've estimated maintenance costs for the 3rd year of ownership to be $100. In subsequent years you know that maintenance costs will be higher due to increased wear and tear on the mower, therefore you've also estimated that maintenance costs will increase by $50 per year. How much would you need to deposit today, in a savings account that earns 8% interest per year, to pay for the mower's maintenance cost for the first six years?

Explanation / Answer

Ans for 2

Equation for Cash in and Cash out over the period of 12 years

(6000(((((5000(1.1)-C)(1.1)-C)(1.1)-C)(1.1)-C)(1.1)-C)(1.1)-C)(1.1)-C-500)(1.1)-C-500)(1.1)-C-500)(1.1)-C-500)(1.1)-C-500)(1.1)-C-500=0

Using Excel solver we receive C =1001.036

C=1001.036 1001.035968 1.1 5000 3998.964032 4398.860435 3397.824467 3737.606914 2736.570946 3010.22804 2009.192072 2210.11128 1209.075312 1329.982843 328.9468749 361.8415624 -639.1944056 5360.805594 4359.769626 4795.746589 3794.710621 4174.181683 3173.145715 3490.460287 2489.424319 2738.36675 1737.330782 1911.063861 910.0278927 1001.030682 -0.005286089

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