The case study indicates that the City of Lakeview will not have any additional debt capacity two years from now. The additional debt

service ratio is negative $(-1\mathrm{.}10$ percent$),$ indicating that the city must reduce its existing debt outstanding amount to maintain the debt

service ratio at the benchmark level $(10$ percent$).$ Assume an annual interest rate of $5$ percent and a twenty$-$year maturity for the debt.

How much of the projected debt outstanding in that year $($ $$32\mathrm{.}90$ million$)$ should the city reduce in order to keep its debt service ratio at

the benchmark level?