After seeing its neighboring village obtain a new water tower, the city board of East Dubuque begins planning to replace its water towers. The board estimates that it will need $1,750,000 to build the new water towers in 20 years. At this time, the city board plans to assess its 2753 homeowners with a one-time flat fee surcharge and then invest the money received in a CD paying 9% interest compounded daily 1 use n = 3602 for 20 years.

(a) How much money will the board need to raise at this time to meet the city’s water tower needs at the end of the 20 years?

(b) Before applying the surcharge, the city board receives a federal grant of $100,000 toward the water tower investment. Taking this grant into account, how much should the surcharge be on each homeowner?

If necessary, round all dollar figures to the nearest cent and round percents to the nearest hundredth of a percent.

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KIELE