How much should SKF Steel Company invest in a fund to be able to withdraw $10,000 at the end of every 3 months for five years? The money in the fund is expected to grow at 4% compounded quarterly for the first two years, and 6% compounded quarterly for the next three years
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How much should SKF Steel Company invest in a fund to be able to withdraw $10,000 at the end of every 3 months for five years?
The money in the fund is expected to grow at 4% compounded quarterly for the first two years, and 6% compounded quarterly for the next three years
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- e. Fishbone Corporation wants to withdraw $120,000 (including principal) from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%?Cargojet Corp. is preparing for the replacement of one of its jets in three years by making payments to a sinking fund at the beginning of every six months for the next three years. The fund earns 6% compounded semiannually, and the capital required in three years is $750,000. What is the size of the semiannual payment made to the sinking fund? __________ How much of the maturity value of the fund will be interest? __________ Construct a partial sinking fund schedule showing details of the first two and the last two payments and totals. Round the sinking fund payments, interest payments and increases in the fund to the nearest dollar.A pension fund is making an investment of $100,000 today and expects to receive $1,600 at the end of each month for the next five years. At the end of the fifth year, the capital investment of $100,000 will be returned. What is the internal rate of return compounded annually on this investment?
- Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund should be expected to net $1,900,000 in 35 years. Assume the first deposit is made at the end of this month. What effective annual rate (EAR) is Bank ZLX expecting their new fund to return?An engineering company expects to expand its plant facilities in 6 years at an estimated cost of $68,000. To provide for the expansion, a sinking fund has been established into which equal payments are made at the beginning of every 3 months. Interest is 10% compounded quarterly. (a) What is the size of the quarterly payment? (b) How much of the maturity value will be payments? (c) How much interest will the fund contain?An investment company wants to establish a sinking fund to pay off debts of $85 million which come due in 10 years. The company can earn interest at the rate of 9 percent per year compounded annually. If the first deposit is made at the end of this year, what annual deposit will be required to accumulate the $85 million?
- 2. Northern Flying Science is preparing to buy an aircraft estimated to cost $600,000 by making equal payments at the end of every three months into a sinking fund for five years. Interest earned by the fund is 8% compounded quarterly. a. What is the size of the quarterly payment made to the sinking fund? b. How much of the maturity value of the fund will be interest? c. What is the accumulated value of the fund after two years? interest will the fund earn in the 15th payment interval? d. How much Using BA II Plus CalculatorTo pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water municipality must deposit money into a sinking fund. Payments to the fund will be made quarterly, starting three months from now. If the interest rate for the sinking fund is 8% compounded quarterly, how much will each deposit be?To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water municipality must deposit money into a sinking fund. Payments to the fund will be made quarterly, starting three months from now. If the interest rate for the sinking fund is 8% compounded quarterly,how much will each deposit be?
- 12. Keys Company has a target of establishing a fund of $50 000. If $10 000 is deposited at the end of every six months, and the fund earns interest at 4% compounded quarterly, how long will it take to reach the target?An investor pays $275,000 for a mine that will produce level annual revenue for 18 years. What should the level annual revenue be (received at the end of each year) if the investor is to receive 4% annual return on the investment while recovering the principal in a sinking fund earning 2.5% per year?At the beginning of the year, an investment fund was established with an initial deposit of 500 . A deposit 1000 is made at the end of each month for the first six months. Starting from theend of month 7, a withdrawal of 300 is made at the end of each month for 5 months for a total of 5 withdrawals. The amount in the fund at the end of the year is 12,500. Calculate the dollar-weighted(money-weighted) yield rate earned by the fund during the year.
