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A transit district has asked for assistance in determining the proper fare for its bus system. An effective annual interest rate of 7% is to be used. The following additional information was compiled.

Cost per bus $60,000

Bus life 20 years

Salvage Value $10,000

Miles driven per year 37,440 7

Number of passengers80,000

Operating cost $1.00 per mile in the first year, increasing $0.10 per mile after each year thereafter

8. If the fare is to remain constant for the next 20 years, the breakeven fare per passenger is most nearly: (A) $0.51 per passenger (B) $0.61 per passenger (C) $0.84 per passenger (D) $0.88 per passenger 9. If the transit district decides to set the perpassenger fare at $0.35 for the rst year, approximately how much should the passenger fare go up each year thereafter such that the district can break even in 20 years? (A) $0.022 increase per year (B) $0.036 increase per year (C) $0.06? increase per year (D) $0.022 increase per year 10. If the transit district decides to set the perpassenger fare at $0.35 for the rst year and the perpassenger fare goes up $0.05 each year thereafter, the additional government subsidy (per passenger) needed for the district to break even in 20 years is most nearly? (A) $0.] 1 (B) $0.12 (C) $0.16 (D) $0.21