An investor is purchasing an industrial building. He needs to replace the roof today at a cost of $50.000. The economic life of the roof is 20 years. Inflation is 3.0%. He has an investment account that yields 6.0%. How much must he put aside monthly to cover the future cost of the roof?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 35P
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An investor is purchasing an industrial building. He needs to replace the roof today at a cost of $50.000. The economic life of the roof is 20 years. Inflation is 3.0%. He has an investment account that yields 6.0%. How much must he put aside monthly to cover the future cost of the roof?

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