A company wants to set up a sinking fund to repay a loan of $10,000 in 5 years. If the sinking fund earns an annual interest rate of 6%, how much should the company deposit into the sinking fund each year? 1. $2170 2. $1560 3. $1254 4. $2,000 C

A company would like to have $400,000 in 6 years. How much should be invested semiannually into an account paying 3.6% compounded semiannually? 7. Identify the type of problem. a. Present Value with compound interest b. Future Value of an Annuity c. Present Value of an Annuity d. Amortization e. Sinking Fund 8. Answer the question in the problem. a. $30,681.38 b. $29,754.02. c. $34,245.54 d. $30,160.79 c. $28,541.46

A company decides to borrow $100 000 at j1 = 12% in order to finance a new equipment purchase. One of the conditions of the loan is that the company must make annual payments into a sinking fund (the sinking fund will be used to pay off the loan at the end of 20 years). The sinking-fund investment will earn j1 = 6%. (Do not round intermediate calculations. Round your answers to 2 decimal places.) a) What is the amount of each sinking-fund payment if they are all to be equal? Amount of each sinking-fund 2$ b) What is the total annual cost of the loan? Total annual cost c) What overall annual effective compound interest rate is the company paying to borrow the $100 000 when account is taken of the sinking-fund requirement? Compound interest rate %

A company estimates that it will have to replace a piece of equipment at a cost of $800,000 in 5 years. The company has an account that pays 5.6% interest compounded monthly. The company has two options: a lump sum deposit or a sinking fund c) Instead, if a sinking fund is established, how much should each payment be? d) How much will be earned in interest?