A company estimates that a certain piece of machinery will have to be replaced in five years' time at a cost of R180 000. Equal, monthly payments are deposited into a fund, paying 12% p.a. compounded monthly at the end of each month for 5 years so as to realise the R180 000. The maintenance costs for the current machine are to be drawn from this fund every six months. The first maintenance withdrawal of R2000 is due one year from now and from the second withdrawal onwards, the maintenence cost will increase each half-year at a rate of 5% p.a. The last maintenance cost is due six months before the replacement of the machinery. The value of the monthly deposits ( to the nearest cent) is R type your answer.
A company estimates that a certain piece of machinery will have to be replaced in five years' time at a cost of R180 000. Equal, monthly payments are deposited into a fund, paying 12% p.a. compounded monthly at the end of each month for 5 years so as to realise the R180 000. The maintenance costs for the current machine are to be drawn from this fund every six months. The first maintenance withdrawal of R2000 is due one year from now and from the second withdrawal onwards, the maintenence cost will increase each half-year at a rate of 5% p.a. The last maintenance cost is due six months before the replacement of the machinery. The value of the monthly deposits ( to the nearest cent) is R type your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:A company estimates that a certain piece of machinery will have to be replaced in five years' time at a cost of R180 000. Equal, monthly payments are deposited into a fund,
paying 12% p.a. compounded monthly at the end of each month for 5 years so as to realise the R180 000. The maintenance costs for the current machine are to be drawn
from this fund every six months. The first maintenance withdrawal of R2000 is due one year from now and from the second withdrawal onwards, the maintenence cost will
increase each half-year at a rate of 5% p.a. The last maintenance cost is due six months before the replacement of the machinery. The value of the monthly deposits ( to the
nearest cent) is R
type your answer.
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