In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.) $3500 yearly at 7% to accumulate $100,000.
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.) $3500 yearly at 7% to accumulate $100,000.
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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![In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.
Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.)
$3500 yearly at 7% to accumulate $100,000.
[Input box] yr](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d8e838a-6c8b-4033-a5e3-a56465c5aa54%2F36326c76-4174-47f4-830a-4cac4abccf42%2Fm8qmarh_processed.png&w=3840&q=75)
Transcribed Image Text:In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.
Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.)
$3500 yearly at 7% to accumulate $100,000.
[Input box] yr
Expert Solution
Step 1
Time taken can be calculated using NPER function in excel.
=NPER(rate,pmt,pv,[fv],[type])
- Rate The interest rate for the loan.
- Nper The total number of payments for the loan.
- Pmt = payment per period
- Pv The present value
- Fv The future value
- Type The number 0 (zero) or 1 and indicates when payments are due.
Step by step
Solved in 3 steps with 1 images
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