A small business has determined that the machinery they currently use will wear out in 16 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 1.8 percent compounded quarterly and the cost of the machinery will be $295,000, how much will the company have to deposit today?

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
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A small business has determined that the machinery they currently use will wear out in 16 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 1.8 percent compounded quarterly and the
cost of the machinery will be $295,000, how much will the company have to deposit today?
Transcribed Image Text:A small business has determined that the machinery they currently use will wear out in 16 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 1.8 percent compounded quarterly and the cost of the machinery will be $295,000, how much will the company have to deposit today?
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