To provide for expansion, a company has established a sinking fund earning 9% semi-annually. The fund is anticipated to reach a balance of $51,000 in 13 years. Payments are made at thebeginning of every 6 months.(a)What is the size of the periodic payment?(b) What is the accumulated balance at the end of payment period 13?(a) The size of the periodic payment is $(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Future value is the estimated current value of future cash flows that is discounted at an assumed…

Answered: To provide for expansion, a company has…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 24P

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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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