1. A new bioengineering lab is to be built. Initial construction costs are anticipated to be $120, 000, and annual maintenance expenses are expected to be $6500 for the first 20 years and $2, 000 for every year thereafter. The lab is expected to be maintained indefinitely. Using an interest rate of 10% per year, what is the capitalized cost of this facility?
2. You purchase $28, 000 worth of stocks. If the current rate of inflation is 6% and the effective annual return on your investment is expected to be 10%, how long will it take for your investment to reach $40, 000?