5. The payments made in a sinking fund are $5, 000 at the end of each quarter for 3 years. Assume the interest rate is 10%compounded quarterly. Calculate the interest earned at the end of Period 2. Period Amount of Deposit Interest Earned Account Balance $5, 000 $5, 000 1 $0.00 $5,000 ?? $5, 000 $5, 000 3 4. O $12, 500 $500 $125 O $12.50

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
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5. The payments made in a sinking fund are $5, 000 at the end of each quarter for 3 years. Assume the interest rate is 10%compounded quarterly.
Calculate the interest earned at the end of Period 2.
Period
Amount of Deposit
Interest Earned
Account Balance
$5, 000
$5, 000
$5, 000
$5, 000
$0.00
$5, 000
2
??
3
4
$12, 500
$500
$125
$12.50
Transcribed Image Text:5. The payments made in a sinking fund are $5, 000 at the end of each quarter for 3 years. Assume the interest rate is 10%compounded quarterly. Calculate the interest earned at the end of Period 2. Period Amount of Deposit Interest Earned Account Balance $5, 000 $5, 000 $5, 000 $5, 000 $0.00 $5, 000 2 ?? 3 4 $12, 500 $500 $125 $12.50
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