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Social ScienceA corporation creates a sinking fund in order to have $860,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each quarterif the annual interest rate is 6.5% compounded quarterly? (Round your answers to the nearest cent.)$ 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 $How much interest was earned during the third quarter of the 4th year?$
A corporation creates a sinking fund in order to have $860,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each quarterif the annual interest rate is 6.5% compounded quarterly? (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 | $ |
How much interest was earned during the third quarter of the 4th year?
$
Expert Answer
Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If you want remaining sub-parts to be solved, then please resubmit the whole question and specify those sub-parts you want us to solve.
Now come to the question:
According to the given question:
Amount (A) =$860,000
Time (t) =11 years
Rate of interest(r) =6.5%
It is needed to calculate the amount to be placed at the end of each quarter and the interest earned over the life of the account.
Formula used to calculate amount that is compounded quarterly is:
Image Transcriptionclose
4t A P 1+
Now substitute the value...
Image Transcriptionclose
4f A P 1+ 4/11) 0.065 860000 P 1+ - 4 860000 P(1+0.01625) 860000 P(2.0325) P $423124.2312
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