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In developing a subdivision, the developer is required to build the roads to the city building code specifications and to deposit an amount which will allow the city to repave the roads every four years for an indefinite period of time. The costs to construct the roads are $25,000 and $4,000 each time repaving is required. The city estimates they will be able to invest the deposited sum at 6% indefinitely. 1. How much money should the city require the developer to deposit?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9678181

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