The city of Suburbia received a proposal for plant watering from Water Can Garde

Question

The city of Suburbia received a proposal for plant watering from Water Can Gardening Company. The company would water all city plants for $646 each quarter, increasing the amount charged by $12 each subsequent quarter. Water Can Gardening Company requires a 8-year commitment.

The mayor has asked you to calculate the equivalent uniform quarterly cost for the plant water service to help with budgeting. Use a nominal annual interest rate of 6%, compounded quarterly, to make the calculation.

Enter your answer as follows: 12345
Round your answer. Do not use a dollar sign ("$"), any commas (",") or a decimal point (".")

Explanation / Answer

Period Payment PVf @ 1.5% Present Values 1 646 0.985222 636.4532 2 658 0.970662 638.6954 3 670 0.956317 640.7324 4 682 0.942184 642.5696 5 694 0.92826 644.2127 6 706 0.914542 645.6668 7 718 0.901027 646.9372 8 730 0.887711 648.0291 9 742 0.874592 648.9474 10 754 0.861667 649.6971 11 766 0.848933 650.2829 12 778 0.836387 650.7094 13 790 0.824027 650.9813 14 802 0.811849 651.1031 15 814 0.799852 651.0791 16 826 0.788031 650.9136 17 838 0.776385 650.6108 18 850 0.764912 650.1748 19 862 0.753607 649.6096 20 874 0.74247 648.9191 21 886 0.731498 648.1072 22 898 0.720688 647.1775 23 910 0.710037 646.1337 24 922 0.699544 644.9795 25 934 0.689206 643.7182 26 946 0.679021 642.3534 27 958 0.668986 640.8883 28 970 0.659099 639.3263 29 982 0.649359 637.6704 30 994 0.639762 635.9239 31 1006 0.630308 634.0897 32 1018 0.620993 632.1708 Present worth 20638.86 Divide: Annuity Factor for 32 periods 25.2671 Equivalent Uniform Quaterly cost 816.8274

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