Wholesome A new Wholesome restaurant can be opened in Cape Town. This will however require funds, which Feast does not have available internally. To bridge this, Feast has identified a savings fund into which equal semi-annual payments can be made for 2 years. The saving fund offers an interest rate of 8.9% compounded monthly. After the 2-year period, the payments into the fund will seize, however, the accumulated funds will be kept in the savings fund for a further year and six months period in order to receive further interest. Once this time has lapsed, 3 annual payments of R1 036 400 will be made to Feast from the saving fund at the start of each period. All funds required by Feast’s restaurants are obtained from Feast’s general pool of funds Refer to Wholesome. Assist Feast Ltd in calculating the value of the payments to be made into the savings fund

Wholesome A new Wholesome restaurant can be opened in Cape Town. This will however require funds, which Feast does not have available internally. To bridge this, Feast has identified a savings fund into which equal semi-annual payments can be made for 2 years. The saving fund offers an interest rate of 8.9% compounded monthly. After the 2-year period, the payments into the fund will seize, however, the accumulated funds will be kept in the savings fund for a further year and six months period in order to receive further interest. Once this time has lapsed, 3 annual payments of R1 036 400 will be made to Feast from the saving fund at the start of each period. All funds required by Feast’s restaurants are obtained from Feast’s general pool of funds Refer to Wholesome. Assist Feast Ltd in calculating the value of the payments to be made into the savings fund

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 23E

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