Explanation Given Information: Payment where payment frequency is 3 months, the time duration is 4 years, the nominal rate of return is 4 % and interest is compounded quarterly and future value amount is $ 18 , 750 . Formula used: The formula to compute the sinking fund payment is, Sinking fund payment = Future value of sinking fund Future value table factor Calculation: Consider that payment frequency is 3 months, the time duration is 4 years, the nominal rate of return is 4 % and interest is compounded quarterly and future value amount is $ 18 , 750 . The rate period is 1 % ( 4 % ÷ 4 period per year ) . The number of periods is 16 ( 4 years × 4 period per year )

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

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Chapter 12.III, Problem 5RE

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To calculate: The amount of sinking fund payment where payment frequency is 3 months, the time duration is 4 years, the nominal rate of return is 4% and interest is compounded quarterly and future value amount is $18,750.

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Chapter 12.III, Problem 4RE

Chapter 12.III, Problem 6RE

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Chapter 12 Solutions

Contemporary Mathematics for Business & Consumers

Ch. 12.I - Freeport Bank is paying 8% interest compounded...Ch. 12.I - Vista Savings Loan is paying 6% interest...Ch. 12.I - Katrina Byrd invested $250 at the end of every...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...

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The amount of sinking fund payment where payment frequency is 3 months, the time duration is 4 years, the nominal rate of return is 4 % and interest is compounded quarterly and future value amount is $ 18 , 750 .

Solution Summary: The author calculates the amount of sinking fund payment based on the following formula: underset_1,086.46

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To calculate: The amount of sinking fund payment where payment frequency is 3 months, the time duration is 4 years, the nominal rate of return is 4% and interest is compounded quarterly and future value amount is $18,750.

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Chapter 12 Solutions