The ABC Company has contracted to make the following payments: 500,000 immediately; 50,000 at the end of year 1; 75,000 at the end of year 2; 100,000 at the end of year 3; 125,000 at the end of year 4; 150,000 at the end of year 5. What fixed amount of money should the company plan to set aside each year, at 8% interest per year, compounded annually, in order to make the above payments?

The ABC Company has contracted to make the following payments: 500,000 immediately; 50,000 at the end of year 1; 75,000 at the end of year 2; 100,000 at the end of year 3; 125,000 at the end of year 4; 150,000 at the end of year 5. What fixed amount of money should the company plan to set aside each year, at 8% interest per year, compounded annually, in order to make the above payments?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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