Asked by Tommy Grias on Jun 17, 2024
Verified
Martin Company issued $900000 10-year bonds and agreed to make annual sinking fund deposits of $72000. The deposits are made at the end of each year to a fund paying 5% interest compounded annually. What amount will be in the sinking fund at the end of the 10 years?
Sinking Fund Deposits
Money regularly set aside by a company to repay a debt or replace an asset in the future.
Compounded Annually
An investment or loan interest calculation method where interest is added to the principal sum at the end of each year, with future interest then earned on the new total.
- Master the concepts and calculate the future financial worth of investments.
Verified Answer
TG
Tanesha GibbonsJun 24, 2024
Final Answer :
Use Table 2.
$72000 × 12.57789 (10 periods and 5%) = $905608.08
$72000 × 12.57789 (10 periods and 5%) = $905608.08
Learning Objectives
- Master the concepts and calculate the future financial worth of investments.