How New Mexico abandoned 1,000 oil and gas wells overnight
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NMTeX Oil company owns several gas wells in Carlsbad, NM. Income from the depleting wells has been decreasing according to an arithmetic gradient for the past five years. If the interest rate is 10% per year and income in year 1 from well no. 24 was $390,000 and it decreased by $15,000 each year thereafter, (a) what was the income in year 3, and (b) what was the equivalent annual worth of the income through year 5?
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