Answered: What monthly deposit will be required…

Business

Finance

What monthly deposit will be required to accumulate the PKR 800 million? How much interest

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 34P

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Question

A major city wants to establish a sinking fund to pay off debts of PKR 800 million which come due in 10 years. The city can earn interest at the rate of 8 percent per year compounded monthly. If first deposit is made 1 month from now;

What monthly deposit will be required to accumulate the PKR 800 million?

How much interest will be earned on these deposits

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