If first year estimate of electricity cost is Rs. 55,000, and, historical data reveal that it is expected to increase at 8.5% per year, then what will be the increased electricity cost at EOY 2?

To calculate the increased electricity cost at the end of year 2, we need to apply the annual increase rate of 8.5% to the cost for two consecutive years.

Here are the steps:

1. Calculate the increase for the first year: Rs. 55,000 * 8.5/100 = Rs. 4,675. This is the amount by which the cost increases in the first year.

2. Add this increase to the initial cost to get the cost at the end of the first year: Rs. 55,000 + Rs. 4,675 = Rs. 59,675.

3. Calculate the increase for the second year: Rs. 59,675 * 8.5/100 = Rs. 5,072.375. This is the amount by which the cost increases in the second year.

4. Add this increase to the cost at the end of the first year to get the cost at the end of the second year: Rs. 59,675 + Rs. 5,072.375 = Rs. 64,747.375.

So, the increased electricity cost at the end of year 2 will be approximately Rs. 64,747.38.