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An infrastructure bank will loan $5 million to a water utility at a subsidized rate of 3%. The infrastructure bank must raise its funds by
An infrastructure bank will loan $5 million to a water utility at a subsidized rate of 3%. The infrastructure bank must raise its funds by selling tax exempt bonds on the open market at 4%. The term of the loan to the utility is 5 years. How much money must the bank lay out over the five years to cover this subsidy?
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