Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 13

A southwestern city has a contract with Firestone Vehicle Fleet Maintenance to provide maintenance services on its fleet of city owned vehicles such as street sweepers, garbage trucks, backhoes, and carpool vehicles. The contract price is fixed at $45,000 per year for 4 years. If you were asked to convert the future amounts into constant value amounts per today's dollars, what would the respective amounts be Assume the current market interest rate of 10% per year and inflation rate of 5% per year are expected to remain the same over the next 4 year period.