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The town of Kildare bought firefighting equipment for $96,000. The financing agreement provides for annual interest payments and equal payments into a sinking fund for
The town of Kildare bought firefighting equipment for $96,000. The financing agreement provides for annual interest payments and equal payments into a sinking fund for ten years. After ten years the proceeds of the sinking fund will be used to retire the principal. Interest on the debt is 14.5% compounded annually and interest earned by the sinking fund is 13$ compounded annually.
What is the annual cost of the debt?
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