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
Related questions
Question
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?
Expert Solution
Step 1
Information Provided:
- Cost of machinery = $590,000
- Interest rate = 5% compounded monthly
- Period = 4 years
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Solved in 3 steps
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