Cover the cost of the rehabilitation

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Reference no: EM131969704

A city has constructed a transit hub downtown. It is anticipated that in 20 years the hub will require a renovation at a cost of $400,000. Rent for shops at the station is charged on an annual basis each year beginning in year 1 and will increase by $50 each year following. Given the rent is deposited at the end of each year into an investment account earning 5% interest, how much should the initial rent collected be (in year 1) to just cover the cost of the rehabilitation?

Reference no: EM131969704

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