A supplier of certain suspension system parts for General Motors wants to have a contingency fund that it can draw on during down periods of the economy. The company wants to have $15 million in the fund 5 years from now. If the company deposits $1.5 million now, determine the uniform amount to add at the end of each of the next 5 years to reach its goal, provided the fund earns 10% per year. Solve using (a) tabulated factors, and (b) the Goal Seek tool in Excel.
A supplier of certain suspension system parts for General Motors wants to have a contingency fund that it can draw on during down periods of the economy. The company wants to have $15 million in the fund 5 years from now. If the company deposits $1.5 million now, determine the uniform amount to add at the end of each of the next 5 years to reach its goal, provided the fund earns 10% per year. Solve using (a) tabulated factors, and (b) the Goal Seek tool in Excel.
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 40P
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A supplier of certain suspension system parts for General Motors wants to have a contingency fund that it can draw on during down periods of the economy. The company wants to have $15 million in the fund 5 years from now. If the company deposits $1.5 million now, determine the uniform amount to add at the end of each of the next 5 years to reach its goal, provided the fund earns 10% per year. Solve using (a) tabulated factors, and (b) the Goal Seek tool in Excel.
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