Answered

At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Bates Company issued $1,000,000, 10-year bonds. It agreed to make annual deposits of $78,000 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 10 years. The deposits are made at the end of each year into an account paying 6% annual interest. What amount will be in the sinking fund at the end of 10 years

Sagot :

facundobuzzetti

Answer:

FV= 1,243,119.12

Explanation:

Giving the following information:

Annual deposit= $78,000

Number of periods= 10 years

Interest rate= 0.1

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {78,000*[(1.1^10) - 1]} / 0.1

FV= 1,243,119.12

Your visit means a lot to us. Don't hesitate to return for more reliable answers to any questions you may have. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Keep exploring Westonci.ca for more insightful answers to your questions. We're here to help.