Find the amount of each of 5 payments made at the end of each year into...

Find the amount of each of 5 payments made at the end of each year into a 6% rate sinking fund which produces $21,000 at the end of 5 years.

A. $2,053.18

B. $3,514.46

C. $3,725.32

D. $4,200.00

Solutions

Expert Solution

Future value of annuity=Annuity[(1+rate)^time period-1]/rate

21000=Annuity[(1.06)^5-1]/0.06

21000=Annuity*5.63709296

Annuity=21000/5.63709296

=$3725.32(Approx)

jeff jeffy answered 1 year ago

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