A corporation creates a sinking fund in order to have $580,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each month if the annualinterest rate is 5% compounded monthly? (Round your answers to the nearest cent.)$How much interest would they earn over the life of the account?$Determine the value of the fund after 2, 4, and 6 years.2 years $4 years $6 years $

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Asked Nov 25, 2019
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A corporation creates a sinking fund in order to have $580,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each month if the annual
interest rate is 5% compounded monthly? (Round your answers to the nearest cent.)
$
How much interest would they earn over the life of the account?
$
Determine the value of the fund after 2, 4, and 6 years.
2 years $
4 years $
6 years $
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A corporation creates a sinking fund in order to have $580,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each month if the annual interest rate is 5% compounded monthly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $

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Expert Answer

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nt The compound-interest formula is, A= P1+1 where A is the future amount, P is the principal, r is the interest rate, n is the number of compoundings in a year, t is the total number of years Here, A S580, 000, t = 11, r = 0.05,n =12 Substitute A S580, 000, t = 11,r =0.05,n 12 in A= P1+1 n

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12 11 0.05 $580,000 P 1 12 132 0.05 $580,000 P 1+ 12 $580,000 P(1.73) P 335,013.48 Thus, the principal amount is 335,013.48 335,013.48 Therefore $2,537.98 should be placed in the account at the end of each month 132

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The interest eaned over the life of the account is, 580.000-335,013.48 244,986.52

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