Please awnser the question stepbystep Please do not skip any

Please awnser the question step-by-step. Please do not skip anything (including the math). Thank you!!

Tacozza Electric, which manufactures brush dc servomotors, budgeted $75,000 per year to pay for certain components over the next 5 years. If the company expects to spend $15,000 in year 1, how much of a uniform (arithmetic) Increase each year is the company expecting in the cost of this part? Assume the company uses an interest rate of 10% per year.

Solution

P = $100,000

At the end of 1st year the amount becomes

F = P(F/P, i, n) = 100,000(F/P, 8%, 1) = 100,000 x 1.080 = $108,000

At the end of 1st year, $ 150,000 is added to $108,000. Now

P = $258,000

At the end of 4th year the amount becomes

F = P(F/P, i, n) = 258,000(F/P, 8%, 3) = 258,000 x 1.260 = $325,080

Therefore, the company will have $325,080 in the account