Explanation Given: Future value is S = $ 9000 . Interest rate per annum is 4.8% compounded monthly and number of years is 2 1 2 . Explanation: Interest is compounded monthly. So, i = 1 12 × 4.8 % = 1 12 × 0.048 = 0.004 Number of periods will be n = 12 × 2 1 2 = 12 × 5 2 = 30 Use the sinking fund payment formula: R = S i ( 1 + i ) n − 1 Here, S is the future value, R is the periodic payment, i is the interest rate per period, and n is the number of periods. Substituting S = $ 9000 , i = 0

11th Edition

ISBN: 9780321979438

Author: Margaret L. Lial, Raymond N. Greenwell, Nathan P. Ritchey

Publisher: PEARSON

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Chapter 5.2, Problem 38E

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The periodic payment of a sinking fund with 4.8% interest compounded monthly for 212 yearsand S=$9000.

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Chapter 5.2, Problem 37E

Chapter 5.2, Problem 39E

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The periodic payment of a sinking fund with 4.8% interest compounded monthly for 2 1 2 yearsand S = $ 9000 .

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The periodic payment of a sinking fund with 4.8% interest compounded monthly for 212 yearsand S=$9000.

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Chapter 5 Solutions