Answer:
$660,000
Explanation:
BNSF Railroad savings for each year with $10,000 increment for next five years is as shown;
Year 1: $100,000
Year 2: $110,000
Year 3: $120,000
Year 4: $130,000
Year 5: $140,000
Total saving after five years will be the summation of all the savings each year.
Annualized savings = $100,000+$110,000+$120,000+$130,000+$140,000
Annualized savings = $600,000
If there is 10% interest on the annualized savings;
Interest = 10% × $600,000
Interest = $60,000
Annualized savings at an interest rate of 10% = $600,000 + $60,000
= $660,000
