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Title: Find the amount of each payment to be made into a sinking fund which earns Post by: Catracho on Oct 14, 2018 Find the amount of each payment to be made into a sinking fund which earns 7% compounded quarterly and produces $34,000 at the end of 3.5 years. Payments are made at the end of each period.
The payment size is $? (Do not round until the final answer. Then round to the nearest cent.) Title: Re: Find the amount of each payment to be made into a sinking fund which earns Post by: bio_man on Oct 14, 2018 Here you'll need the annuity formula:
\(A=\frac{R\left[\left(1+\frac{r}{n}\right)^t−1\right]}{\frac{r}{n}}\) A = future value amount \(\rightarrow\) 34 000 r = interest rate \(\rightarrow\) 7% or 0.07 n = compounding periods per year \(\rightarrow\) 4 t = total number of deposits \(\rightarrow\) 4 + 4 + 4 + 2 = 14 \(34000=\frac{R\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]}{\frac{0.07}{4}}\) \(34000\left(\frac{0.07}{4}\right)=R\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]\) \(\frac{34000\left(\frac{0.07}{4}\right)}{\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]}=R\) \(R=2164.291\) Some videos for you https://www.youtube.com/watch?v=cS0JEhKH-9U https://www.youtube.com/watch?v=vbDW0IwbehM |