A rotary engine powers a vertical takeoff and landing VTOL p

A rotary engine powers a vertical takeoff and landing (VTOL) personal aircraft known as the Moller Skycar M400. It is a flying car known as a personal air vehicle (PAV), and it is expected to make its first untethered flight in 2020. The PAV has been under development for 26 years at a total cost of $110 million. Assuming the $110 million was spent in an equal amount each year, determine the future worth at the end of the 26-year period at an interest rate of 10% per year.

The future worth is $

Solution

Annual spending = $110 million / 26 = $110,000,000 / 26 = $4,230,769.23

Future worth ($) = 4,230,769.23 x F/A(10%, 26) = 4,230,769.23 x 109.1818** = 461,923,000

**From F/A Factor table