Need help with finite mathematics "True or False" #6

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True or false. A sinking fund is the accumulated amount to be realized at some future date (the end of the term) when a fixed number of periodic payments are paid into an account earning interest at the rate of i per period.

* If statement is false, make the statement true.

Nov 10th, 2015

Thank you for the opportunity to help you with your question!

True.  A sinking fund is a fund formed by periodically setting aside money to repay a debt or replace a wasting asset (gradually over time).

The amount of money at the nth period equals the amount at the (n- 1) period plus the interest earned on that plus the periodic payment.  Similar to the value of an ordinary annuity.


Please let me know if you need any clarification. I'm always happy to answer your questions.
Nov 10th, 2015

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Nov 10th, 2015
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