Easterly City has $47 million of debt recorded in its schedule of changes in long-term obligations, made up of $30 million of general obligation debt, $1 million of compensated absences payable, $4 million of claims and judgments, and $12 million of obligations under capital leases. The state limits the amount of general obligation debt that can be issued by a city to 20 percent of the assessed value of its taxable property. The assessed value of property in Easterly City is $250 million. The citys legal debt margin is

1. $ 3 million.
2. $ 20 million.
3. $ 30 million.
4. $50 million.

Need calculation and explanation