The City of Metropolis Borrows $88,000,000 So That It Can

question 44

Multiple Choice

The city of Metropolis borrows $88,000,000 so that it can build a football stadium. It plans to set up a sinking fund that will repay the loan 10 years later. Assume a 6 percent interest rate per year. What will Metropolis have to place in the fund at the beginning of each year in order to pay back the $88,000,000?

• A) $6,676,380
• B) $536,980
• C) $534,309
• D) $6,298,472

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