A company has to retire 500,000 debenture of 8% interest 10 years from today. The company plans to put a fixed amount into a sinking fund each year for 10 year. A separate fund is created for the purpose. The first payment will be paid at the end of the current year. The company anticipated that the fund will earn 6% a year. What should be the installments to accumulate 500,000 from now?

A company has to retire 500,000 debenture of 8% interest 10 years from today. The company plans to put a fixed amount into a sinking fund each year for 10 year. A separate fund is created for the purpose. The first payment will be paid at the end of the current year. The company anticipated that the fund will earn 6% a year. What should be the installments to accumulate 500,000 from now?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 9RE

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