What amount must he raise for its establishment

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The local Audubon Society has just put a new bird feeder in the park at a cost of $500. The feeder has a useful life of 5 years and an annual maintenance cost of $50. Fred, was very impressed with the project. He wants to establish a fund that will maintain the feeder in perpetuity. Replacement feeders cost $500 every 5 years. If the fund will earn 5% interest, what amount must he raise for its establishment? Note that both maintenance and replacement costs following the initial investment must be covered.

Reference no: EM131101296

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