A company has to retire 500,000 debenture of 8% interest 10 years from today. The company plans to put a fixed amount into a sinking fund each year for 10 year. A separate fund is created for the purpose. The first payment will be paid at the end of the current year. The company anticipated that the fund will earn 6% a year. What should be the installments to accumulate 500,000 from now?
A company has to retire 500,000 debenture of 8% interest 10 years from today. The company plans to put a fixed amount into a sinking fund each year for 10 year. A separate fund is created for the purpose. The first payment will be paid at the end of the current year. The company anticipated that the fund will earn 6% a year. What should be the installments to accumulate 500,000 from now?
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
Problem 1PS
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A company has to retire 500,000 debenture of 8% interest 10 years from today. The company plans to put a fixed amount into a sinking fund each year for 10 year. A separate fund is created for the purpose. The first payment will be paid at the end of the current year. The company anticipated that the fund will earn 6% a year. What should be the installments to accumulate 500,000 from now?
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