Ask a Question
  
  
  
Top Posters
Since Sunday
106
100
28
15
13
13
13
12
12
12
11
11
New Topic  
wrote...
Express Lane Plus
Posts: 351
Rep: 0 0
2 months ago
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. $40,000 to be accumulated in 9 ​years; annual payments of ​$3507
The interest rate needed is approximately
​%.?
​(Round to two decimal places as​ needed.)
Read 94 times
1 Reply
Related Topics
Replies
wrote...
Educator
2 months ago
We use the sinking fund payment formula to find the interest rate i - we assume it's compounded annually, hence \(n\) is 9.

\(R=\frac{Si}{\left(1+i\right)^n-1}\)

\(3507=\frac{\left(40000\right)i}{\left(1+i\right)^9-1}\)

Multiply both sides by the denominator:

\(3507\left[\left(1+i\right)^9-1\right]=\left(40000\right)i\)

Expand the left side:

\(3507\left(1+i\right)^9-3507=\left(40000\right)i\)

Moving everything over to the left side and set it equal to y.

\(3507\left(1+i\right)^9-40000i-3507=y\)

Now graph it: (shown below)

You should get 0.05819 as a root. Multiply this by 100% to get: 5.82
Attached file
Thumbnail(s):
You must login or register to gain access to this attachment.
The best way to say thank you is with a positive review:

  https://trustpilot.com/review/biology-forums.com 

Your support goes a long way!


Make a note request here
New Topic      
Explore
Post your homework questions and get free online help from our incredible volunteers.
Learn More
Improve Grades
Help Others
Save Time
Accessible 24/7
  115 People Browsing
Related Images
 106
 85
 92
Your Opinion
What percentage of nature vs. nurture dictates human intelligence?
Votes: 63

Previous poll results: What's your favorite coffee beverage?