Maintenance costs on a bridge are $5,000 every five years starting at the end of year 5. For analysis purposes, the bridge is assumed to have an infinite life. What is the Capitalized Equivalent (CE) cost of these infinite payments, assuming an annual interest rate of 10% compounded annually?

$8,189.87

Explanation:

The Capitalized Equivalent (CE) cost will be computed using the PV value of a perpetuity formula. Thus, for an amount (A) paid every 5 years, an annual interest rate of 10%, the CE cost will be

where is the rate over a 5-year period.

The rate over a 5-year period is computed as follows:

= 1.61051 - 1 = 0.61051 = 61.051%

Therefore, the CE Cost = = $8,189.87

Several characters in The Land face inequality. This unfairness is bad for characters because it affects them in a negative way. Paul is picked on when he is young because he can read and has special privileges because he is part white. The boys who pick on him do it because they are angry about the inequality. However, later in the novel Paul experiences inequality too. He is not allowed to eat with his white family when company comes, and he is not allowed to go to the same school as his white brother. Paul feels like his family is divided instead of together.