Pay for maintenance of the pit mine in perpetuity

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Reference no: EM131391788

An open pit mine must fund an account now to pay for maintenance of the pit mine in perpetuity (after the mind shuts down in 30 years). The cost until shut down are part of the mine's operating cost. The maintenance costs begin in 31st year at $300000 annually.

1. How much must be deposited now if the fund will earn 5% interest?

2. How much does this change if the interest rate is 4%?

Reference no: EM131391788

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