A construction company wishes to buy a fleet of scrapers to be used in a highway project, which will be undertaken five years from now. The total cost of such a fleet is estimated to be $500,000 at the end of this five-year period. If the interest rate is 8% compounded annually, what is the amount to be put aside at the end of each year?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A construction company wishes to buy a fleet of scrapers to be used in a highway
project, which will be undertaken five years from now. The total cost of such a fleet
is estimated to be $500,000 at the end of this five-year period. If the interest rate is
8% compounded annually, what is the amount to be put aside at the end of each
year?
Transcribed Image Text:A construction company wishes to buy a fleet of scrapers to be used in a highway project, which will be undertaken five years from now. The total cost of such a fleet is estimated to be $500,000 at the end of this five-year period. If the interest rate is 8% compounded annually, what is the amount to be put aside at the end of each year?
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