Part of the income that a machine generates isput into a sinking fund to replace the machine when itwears out. If $2,400 is deposited annually at 5% interest, how many years must the machine be kept beforea new machine costing $45,000 can be purchased?

Part of the income that a machine generates isput into a sinking fund to replace the machine when itwears out. If $2,400 is deposited annually at 5% interest, how many years must the machine be kept beforea new machine costing $45,000 can be purchased?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Question

Part of the income that a machine generates is
put into a sinking fund to replace the machine when it
wears out. If $2,400 is deposited annually at 5% interest, how many years must the machine be kept before
a new machine costing $45,000 can be purchased?

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