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Express Lane Plus
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8 months ago
 Find the amount of each payment to be made into a sinking fund which earns 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.) Read 95 times 1 Reply
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Educator
8 months ago
 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 000R = regular deposit/paymentr = interest rate $$\rightarrow$$ 7% or 0.07n = compounding periods per year $$\rightarrow$$ 4t = total number of deposits $$\rightarrow$$ 4 + 4 + 4 + 2 = 14$$34000=\frac{R\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]}{\frac{0.07}{4}}$$$$34000\left(\frac{0.07}{4}\right)=R\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]$$$$\frac{34000\left(\frac{0.07}{4}\right)}{\left[\left(1+\frac{0.07}{4}\right)^{14}−1\right]}=R$$$$R=2164.291$$Rounded: R = 2164.29Some videos for you
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