   Chapter 12.III, Problem 9TIE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Big Sky Ski Rental Center will need $40,000 in 6 years to replace aging equipment. What sinking fund payment is required at the end of each month at 6% interest compounded monthly to amount to the$40,000 in 6 years?

To determine

To calculate: The amount of sinking fund payment required by Big Sky Ski Rental Center to replace aging equipment at the end of each month at 6% interest compounded monthly to amount to the $40,000 in 6 years. Explanation Given Information: Big Sky Ski Rental Center replaces aging equipment at the end of each month at 6% interest compounded monthly to amount to the$40,000 in 6 years.

Formula used:

The formula to compute the sinking fund payment is:

Sinking fund payment=FV×i(1+i)n1

Where, FV is the future value, i is the interest rate per period, n is the number of periods.

Calculation:

Consider that payment frequency is 1 month, time duration is 6 years, nominal rate of return is 6% and interest is compounded monthly and future value amount is \$40,000.

The rate period is 0.5% or 0.005(6%÷12 period per year).

The number of periods is 72(6 years×12 period per year)

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

#### In Exercises 49-62, find the indicated limit, if it exists. 51. limx0x2xx

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

#### Evaluate the expression sin Exercises 116. (23)2

Finite Mathematics and Applied Calculus (MindTap Course List)

#### Compute C7,7.

Understanding Basic Statistics

#### What is the goal of a single-case experimental research design?

Research Methods for the Behavioral Sciences (MindTap Course List) 