Ricky Fowler borrowed $70,000 on March 1, 2018. This amount plus accrued interest at 6% compounded semiannually is to be repaid March 1, 2028. To retire this debt, Ricky plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2023, and for the next 4 years. The fund is expected to earn 5% per annum. Instructions How much must be contributed each year by Ricky Fowler to provide a fund sufficient to retire the debt on March 1, 2028?
Ricky Fowler borrowed $70,000 on March 1, 2018. This amount plus accrued interest at 6% compounded semiannually is to be repaid March 1, 2028. To retire this debt, Ricky plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2023, and for the next 4 years. The fund is expected to earn 5% per annum. Instructions How much must be contributed each year by Ricky Fowler to provide a fund sufficient to retire the debt on March 1, 2028?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ricky Fowler borrowed $70,000 on March 1, 2018. This amount plus accrued interest at 6% compounded semiannually is to be repaid March 1, 2028. To retire this debt, Ricky plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2023, and for the next 4 years. The fund is expected to earn 5% per annum.
Instructions
How much must be contributed each year by Ricky Fowler to provide a fund sufficient to retire the debt on March 1, 2028?
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