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A municipality has just completed the construction of a bridge. It was calculated that...

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Accounting

A municipality has just completed the construction of a bridge.
It was calculated that operating and maintenance (O&M)
costs of this bridge will be $20000 in the first year with a 5%
increase each year thereafter for the next 4 years. The
interest rate used in calculations was 7.5% per year. What
interest rate should be used to calculate the present worth of
O&M costs over 5 years if we use the geometric series to
present worth conversion factor?
Select one:
a.1.9%
b.2.4%
C.5.0%
d.7.5%
e.8.2%
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