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. $120,000 to be accumulated in 15 years; quarterly payments of $1200. Round to the nearest hundredth. ?A. 6.49% B. 6.41% OC. 6.46% OD. 6.43%
Added by Greg B.
Close
Step 1
Since the payments are made quarterly, there are 4 payments made in a year. Therefore, the total number of payments made over 15 years is 15 * 4 = 60 payments. Show more…
Show all steps
Your feedback will help us improve your experience
Katy Gimbel and 76 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Shaiju T.
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. $27,682 to be accumulated in 6 years; quarterly payments of $1000. The interest rate needed is approximately %. (Type an integer or decimal rounded to two decimal places as needed.)
Babita K.
Tony H.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD