You have been asked to determine the toll

that should be charged per car for the

following situation. A loan is being made

to a company that will build a toll road and

expects to recoup its loan and

the costs of the first 10 years

(no profit during this time).

The number of cars expected to go through th

e toll booth is 1,153,325 cars per month. If

the value of the construction

loan is $50M and the operati

ng and maintenance costs per

month are $1.5M, what should the toll per car be

to cover all of these costs for 10 years?

The nominal annual discount rate is

15%, compounded monthly.