A local Dunkin’ Donuts franchise must buy a new piece of equipment in 5 years that will cost $97,000. The company is setting up a sinking fund to finance the purchase. What will the quarterly deposit be if the fund earns 8% interest? (Use Table 13.3.) (Do not round intermediate calculations. Round your answer to the nearest cent.)Quarterly deposit - Period2%3%4%5%6%8%10%11.00001.00001.00001.00001.00001.00001.000020.49510.49260.49020.48780.48540.48080.476230.32680.32350.32030.31720.31410.30800.30214.0.24260.23900.23550.23200.22860.22190.21550.19220.18840.18460.18,100.17740.17050.16386.0.15850.15460.15080.14700.14340.13630.12960.13450.13050.12660.12280.11910.11210.10548.0.11650.11250.10850.10470.10100.09400.08749.0.10250.09840.09450.09070.08700.08010.0736100.09130.08720.08330.07950.07590.06900.0627110.08220.07810.07410.07040.06680.06010.0540120.07460.07050.0666.. 0.06280.05930.05270.0468130.06810.06400.06010.05650.05300.04650.0408140.06260.05850.05470.05100.04760.04130.0357150.05780.05380.04990.04630.04300.03680.0315160.05370.04960.04580.04230.03900.03300.0278170.05000.04600.04220.03870.03540.02960.0247180.04670.04270.03900.03550.03240.02670.0219190.04380.03980.03610.03270.02960.02410.0195200.04120.03720.03360.03020.02720.02190.0175240.03290.02900.02560.02250.01970.01500.0113280.02700.02330.02000.01710.01460.01050.0075320.02260.01900.01590.01330.01100.00750.0050360.01920.01580.01290.01040.00840.00530.0033400.01660.01330.01050.00830.00650.00390.0023

Solution: Desired amount after 5 years = $97,000 Nos of quarterly periods = 5*4 =20 Quarterly interest rate = 8% / 4 = 2% Quarterly deposit = Desired future value * Sinking fund table value at 2% for 20 periods = $97,000 * 0.0412 = $3,996.40

Business

Accounting

A local Dunkin’ Donuts franchise must buy a new piece of equipment in 5 years that will cost $97,000. The company is setting up a sinking fund to finance the purchase. What will the quarterly deposit be if the fund earns 8% interest? (Use Table 13.3.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Quarterly deposit -

A local Dunkin’ Donuts franchise must buy a new piece of equipment in 5 years that will cost $97,000. The company is setting up a sinking fund to finance the purchase. What will the quarterly deposit be if the fund earns 8% interest? (Use Table 13.3.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Quarterly deposit -

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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