To cover the annual maintenance expenses of their fleet of cranes, the newly

formed Hubly Constructions have just deposited $1 million in a business savings

account earning an interest rate of 4.5% per year. The Chief Financial Officer,

Astrid Wilmer, has calculated that this deposit will just cover all the maintenance

expenses under the following assumptions:

Maintenance expenses will grow at a rate of 3% each year.

Maintenance expenses will be paid at the beginning of each year with the first

expense due in exactly 1 years' time.

The life of the fleet of cranes is 31 years (i.e., the last maintenance expense is

due in exactly 30 years' time).

HINT: set up the set of expenses as a growing annuity and solve for the first cash

flow of the annuity.

$50,378

$40,619

$42,623

$30,000

$94,652