Sinking fund is a fund containing money set aside or saved to pay off a debt or bond, according to Investopedia. An EE firm have the schedule of funds as follows at the end of year 0, P5,000; end of year 1, P4,000; end of year 2, P3,000; and, end of year 3, P2,000. At the end of the fourth year, the equipment costing P25,000 will have to be purchased as a replacement for the old version. Money is valued at 20% by the company. At the time of the purchase, how much money will still be needed to purchase the equipment?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Sinking fund is a fund containing money set aside or saved to pay off a debt or bond, according to Investopedia. An EE firm have the schedule of funds as follows at the end of year 0, P5,000; end of year 1, P4,000; end of year 2, P3,000; and, end of year 3, P2,000. At the end of the fourth year, the equipment costing P25,000 will have to be purchased as a replacement for the old version. Money is valued at 20% by the company. At the time of the purchase, how much money will still be needed to purchase the equipment?

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