Calculating a 'change in maintenance cost' per annum using annuity? - formula for annuity cost basis
The question is:
What would the cost of annual maintenance contract?
The information we have is that the maintenance costs of £ 8,000 per year at present. I need the formula to solve this problem:
Changes in maintenance costs --
X * annuity factor = change in NPV
My shift the NAV is £ 431,868.20
I have a solution, but I have no idea where the annuity to get? Expect nothing. Thank you.
Monday, February 1, 2010
Formula For Annuity Cost Basis Calculating A 'change In Maintenance Cost' Per Annum Using Annuity?
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1 comments:
The present value of an annuity:
[1 - v ^ n] / i
where i = interest rate
v = 1 / (1 + i)
n = number of years.
This will be your annuity.
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