What is the amount of the initial payment

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A city is initiating a sinking fund for development of a new landfill which will be constructed in exactly 10 years.(single payment 10 years from today). The expected inflation rate is 3% per year and the city can invest funds at 6% per year. The cost of the landfill is $10,000,000 in today's dollars. The city wants to fund the landfill by depositing a certain amount one year from now and increasing this by the inflation rate(3%) each payment. What is the amount of the initial payment into the fund at the end of the first year.

Reference no: EM133112027

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