To determine the number of periods for a sinking fund, multiply the years times the number of compounding periods per year.

A) True B) False

True

Please let me know if you have any other questions and best me if you are satisfactory.

can you explain to me how you got that answer above

An example of the use of a sinking fund would be to accumulate a sum of money to modernize equipment.

Suppose Loan is $100 million to be repaid at the end of 4 years. Monthly deposits are made. Interest rate is 22% per year compounded monthly.

So total no: of periods = 12 months * 4 (years) = 48 months

oh ok i got it now

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