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Calculate the present worth of annual expenditures

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Reference no: EM132021348

A municipality has just completed construction of a bridge. It was defined that operation and maintenance (O&M) of this bridge will cost the city $20,000 for the first year with a 5% increase each year thereafter for the next 4 years. The bank rate is 7.5% a year. What interest rate should be used to calculate the present worth of annual expenditures on O&M during the upcoming five year period following the completion of the bridge?

Reference no: EM132021348

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