Problem 3.20 Part of the income that a machine generates is put into a sinking fund to replace the machine when it wears out. If $1,500 is deposited annually at 7% interest, how many years must the machine be kept before a new machine costing $30,000 can be purchased?

Problem 3.20 Part of the income that a machine generates is put into a sinking fund to replace the machine when it wears out. If $1,500 is deposited annually at 7% interest, how many years must the machine be kept before a new machine costing $30,000 can be purchased?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1CQQ

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Question

Problem 3.20 Part of the income that a machine generates is put into a sinking fund to replace
the machine when it wears out. If $1,500 is deposited annually at 7% interest, how many years
must the machine be kept before a new machine costing $30,000 can be purchased?

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