MY NOTESA corporation knows it will need to pay for a $1,200,000 roof in 20 years. It invests monthly in a secure account yielding 3.5%. How much will they need to put into thataccount at the beginning of every month to have enough for the roof when it is time to do the repair?ASK YOUR TEACHER

We need to use future value of annuity due formula to calculate monthly payment. PMT = FVn(1+i)n…

Answered: A corporation knows it will need to pay…

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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Similar questions

Cline Corporation deposits $75,000 every quarter in a savings account (beginning at the end of the current quarter) for the next six years so that it can purchase a new piece of machinery at the end of six years. The interest rate is 4%. How much money will Cline Corporation have at the end of six years? (Use spreadsheet software or a financial calculator to calculate your answer. Do not round any intermediary calculations, and round your final answer to the nearest dollar.) Group of answer choices $2,043,240 $2,023,010 $2,931,195 $1,126,935
If a person spends $12 a week on coffee (assume $600 a year), what would be the future value of that amount over 10 years if the funds were deposited in an account earning 3 percent?
A small business has determined that the machinery they currently use will wear out in 17 years. To replace the new machine when it wears out, the company wants to establish a savings account today. If the interest rate on the account is 1.1 percent per quarter and the cost of the machinery will be $255,000, how much will the company have to deposit today?
A company has had record profits and decided to use some of the profits to pay for manufacturing improvements. If the company can invest $1,600,000.00 in an a annuity will that will make payments at the beginning of every six months for 4 years. If the annuity pays 5.6%, compounded semi-annual. What is the size of payments that the company can expect?The payment amount will be $. (Round to 2 decimal places.)
The Anderson Ltd. manufacturing company is a small manufacturer of plastic products. She needs to purchase an extrusion machine for$150,000. Anderson ltée will borrow money from a bank at an interest rate of7%over five years. The company expects its sales to be low in the first year, but will subsequently increase at an annual rate of10%. The company therefore arranges with the bank to repay the loan with payments increasing by10%per year. Determine the five annual payments. (Hint, you have to find the first payment).
A firm needs to replace most of its machinery in 4 years at a cost of $590,000. The company wishes to create a sinking fund to have this money available in 4 years. How much should the monthly deposits be if the fund earns 5% compounded monthly?

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A corporation knows it will need to pay for a $1,200,000 roof in 20 years. It invests monthly in a secure account yielding 3.5%. How much will they need to put into that account at the beginning of every month to have enough for the roof when it is time to do the repair? ASK YOUR TEACHE