The purchase price of an instrument is $12,000 and its estimated maintenance costs are $500 for the first year, $1500 for the second and $2500 for the third year. After three years of use the instrument is replaced; it has no salvage value. Compute the present equivalent cost of the instrument using 10% interest.
a) $14,070
b) $15,570
c) $15,730
d) $16,500