Title: Find the interest rate needed for the sinking fund to reach the required amount. Assume that the com Post by: Catracho on Oct 14, 2018 Find the interest rate needed for the sinking fund to reach the required amount. Assume that the compounding period is the same as the payment period.
$30,000 to be accumulated in 10 years; annual payments of payments of $2458 The interest rate needed is approximately? % (Round to two decimal places as needed.) Title: Re: Find the interest rate needed for the sinking fund to reach the required amount. Assume that the Post by: bio_man on Oct 14, 2018 F = final \(\rightarrow\) 30 000
P = principal \(\rightarrow\) 2 458 t = years \(\rightarrow\) 10 n = compounding periods per year \(\rightarrow\) 1 (annual) Compound interest formula: \(F=P\left(1+\frac{r}{n}\right)^{nt}\) \(30000=2458\left(1+r\right)^{10}\) \(\frac{30000}{2458}=\left(1+r\right)^{10}\) \(\sqrt[10]{\frac{30000}{2458}}=1+r\) \(\sqrt[10]{\frac{30000}{2458}}-1=r\) \(r=0.2842\) \(\therefore r=28.4\%\) https://www.youtube.com/watch?v=LRp9191vRZI |