Answer
The answer is $\$ 9\frac{1}{3}$ million.
Work Step by Step
The annual payroll is $\$4$ million.
$70\% $ of the payroll is $=\$4 \cdot .70 = \$2.8$.
Therefore the people will receive $\$2.8$ money.
Again they spend $70\% $ of the received money.
$=\$ 2.8 \cdot .70 = \$ 1.96 $
Total spent $=2.8+1.96+1.372+...$ infinite terms.
The formula for the infinite geometric series is
$=\frac{a}{1-r}$
Where $a=2.8$ and $r=0.7$
Total spent $=\frac{2.8}{1-0.7}$
$=\frac{2.8}{0.3}$
$=\frac{28}{3}$
$=\$ 9\frac{1}{3}$ million.
