A company wants to set up a sinking fund to repay a loan of $10,000 in 5 years. If the sinking fund earns an annual interest rate of 6%, how much should the company deposit into the sinking fund each year? 1. $2170 2. $1560 3. $1254 4. $2,000 C

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
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A company wants to set up a sinking
fund to repay a loan of $10,000 in 5
years. If the sinking fund earns an
annual interest rate of 6%, how
much should the company deposit
into the sinking fund each year?
1. $2170
2. $1560
3. $1254
4. $2,000
C
Transcribed Image Text:A company wants to set up a sinking fund to repay a loan of $10,000 in 5 years. If the sinking fund earns an annual interest rate of 6%, how much should the company deposit into the sinking fund each year? 1. $2170 2. $1560 3. $1254 4. $2,000 C
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