What is the amount of payment to be made in a sinking fund?

Business & Finance
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What is the amount of payment to be made in a sinking fund so that the indicated amount will be there when needed. Round to the nearest cent,  $4850 in 7.5 years,  money earns 7% compounded semiannually,  15 semiannual payments

Nov 21st, 2015

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

We have the formula as

Here ,i=7%/2 =3.5% semi-annual interest rate =.035

n=15

FV=$4850

Substitute in the above formula and solve for PMT,we get

Thus$250 must be made into the shrinking fund.

Please rate my answer so that I can further help you in the future.Thanks
Nov 21st, 2015

answer=>$251.35 must be made into the shrinking amount.

Nov 21st, 2015

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