Find the amount of each payment to be made into a sinking fund so that enough will be present to accumulate the following amount. Payments are made at the end of each period. The interest rate given is per period. $70,000; money earns 6% compounded quarterly for 4 years
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Step 1
Given: P = $70,000 i = 6% = 0.06 n = 4 years FV = $70,000(1 + 0.06/4)^(4*4) FV = $70,000(1 + 0.015)^(16) FV = $70,000(1.015)^16 FV = $70,000(1.26899) FV = $88,829.30 Show more…
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