▪mputing Annuity Amounts to a Debt Re nd n January 1, Chang Inc. establishes a bor nd (a bond retirement fund) amounting 00,000. A trustee has agreed to handle t d to increase it each year on a 10% anni

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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Computing Annuity Amounts to a Debt Retirement
Fund
On January 1, Chang Inc. establishes a bond sinking
fund (a bond retirement fund) amounting to
$100,000. A trustee has agreed to handle the fund
and to increase it each year on a 10% annual
compound interest basis. Chang is to make equal
annual contributions to the fund during the next four
years, starting this year.
In answering the following questions, round your
answer to the nearest whole number.
Do not use negative signs with your answers.
a. Compute the required annual deposits assuming
payments begin on December 31 of this year.
$ Answer
b. Compute the required annual deposits assuming
payments begin on January 1 of this year.
$ Answer
Transcribed Image Text:Computing Annuity Amounts to a Debt Retirement Fund On January 1, Chang Inc. establishes a bond sinking fund (a bond retirement fund) amounting to $100,000. A trustee has agreed to handle the fund and to increase it each year on a 10% annual compound interest basis. Chang is to make equal annual contributions to the fund during the next four years, starting this year. In answering the following questions, round your answer to the nearest whole number. Do not use negative signs with your answers. a. Compute the required annual deposits assuming payments begin on December 31 of this year. $ Answer b. Compute the required annual deposits assuming payments begin on January 1 of this year. $ Answer
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