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

timer Asked: Nov 21st, 2015
account_balance_wallet $5

Question Description

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 $28,000 in 10 years,  money earns 10% compounded quarterly,   40 quarterly payments

Tutor Answer

School: New York University

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

We have the formulas 


i=10/4 =2.5% =.025


Substitute the value and solve for PMT.

Thus amount of money in the shrinking fund=$415.41

Please rate my answer so that I can further help you in the future.Thanks

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