engineering company expects to expand its plant facilities in 6 years at an estimated cost of ​$68,000. To provide for the​ expansion, a sinking fund has been established into which equal payments are made at the beginning of every 3 months. Interest is 10​% compounded quarterly.   ​(a) What is the size of the quarterly ​payment? ​(b) How much of the maturity value will be​ payments? ​(c) How much interest will the fund​ conta

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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An engineering company expects to expand its plant facilities in 6 years at an estimated cost of ​$68,000. To provide for the​ expansion, a sinking fund has been established into which equal payments are made at the beginning of every 3 months. Interest is 10​% compounded quarterly.
 
​(a) What is the size of the quarterly ​payment?
​(b) How much of the maturity value will be​ payments?
​(c) How much interest will the fund​ contain?
 
 

 

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