Answer:
$5,917, 965.66 per year
Explanation:
The $48 million will represent the value of all annuities after ten years. The get the amount the city of Glendale should be saving each year, we apply the present value of annuity formula, which is as below.
P = PV × r / 1 − (1+r)−n
P is value of each payment
PV = present value of annuity : $48,000,000.00
r =interest rate : 4 % = 0.04
n: number of periods: 10
P = $48,000,000 x {0.04/(1-(1+0.04)-10}
P = $48,000,000 x {0.04/ 1-0.6755641688)
P =$48,000,000x (0.04/0.3244358312)
P= $48,000,000 x 0.123290951
P= 5,917, 965.66 per year
