A public utility commission requires that a trust fund be established by a private company wishing to build and maintain a water treatment plant for a small city. The company must deposit enough money to build the plant and then to operate and renovate the facility in perpetuity.
The plant will cost $10,000,000 to build, has an annual operating expense of $600,000, and must be renovated every 20 years at a cost of $1,000,000. The trust fund earns 6% interest. What amount must the company put in the trust fund?