Question

A state has $5,000,000 worth of bonds that are due in 20 years. A sinking fund is established to pay off the debt. If the state can earn 10% annually on it's money, what is the annual sinking fund deposit needed? Prepare a table showing the growth of the sinking fund every 5 years. (Please Help)

Answer 1

not that good with interest rate formulas, but i think:

debt = deposit × (1+interest rate)^(number of periods)

so 5000000 = deposit × (1+0.10)^(20)
\[5,000,000 = deposit \times (1.10)^{20}\]

give that a shot dude, and tell me how u go?

Answer 2

ok..thanks alot...jst tried

Answer 3

it correct Jack 1...the answer is $87,298.13 is the value of deposit so in table format for 5 years.

Answer 4

sweet, glad it worked @PeceliVura !

Answer 5

wait, ... what?
i got deposit = 743000 ish

Answer 6

how did u get ur answer?

Answer 7

ok let me show my work...

Answer 8

5000000=A[(1+0.10)^20-1]/0.10
5000000=A(57.27499949)
5000000/57.27499949=A
$87,298.13=A

Answer 9

does it right...

Answer 10

ummm... i'm not sure where ur formula came from, sorry
i don;t know if my way is right or not, but i did it:
FV=PV×(1+r)^n
FV = future Value
PV = present value
r = interest rate
n = number of periods

5000000=deposit×(1+0.10)^20
5000000 = deposit x (1.1)^20
5000000 = doposit x 6.7275
5000000/6.7275 = deposit
deposit = $743,218

Answer 11

Jack that is the Ordinary annuity...FV=A[(1+i)^n-1/i] what do you think which one to used...pls

Answer 12

ahhh, sorry i see it now, annual deposit!

Answer 13

thank you so my sweet...god bless you and you famly

Answer 14

sorry, mabad

Answer 15

\[FV=\frac{A(1+i)^n-1}i \rightarrow \rightarrow or \rightarrow \rightarrow FV= A[\frac {(1+i)^{n-1}}i]\]
is ur equation the frist one or the seconed one?

Answer 16

first one..

Answer 17

can I asked you another question please....sweet.

Answer 18

I have an assigment which was due today Friday but I will submit on Monday...coz I need help more

Answer 19

$87,298.10, ur spot on then above, sorry for my basic answer before

Answer 20

of course ask away, i'll help if i can ;)

Answer 21

no I take your answer...I belive it is right...

Answer 22

wait...sorry

Answer 23

u have email address...to up load question.

Answer 24

sorry peli, i gave it out to strangers once and hot hacked, had to get a new one
u can post stuff by hitting the attach file button below the here, its blue

Answer 25

ok sorry...thanks

Answer 26

Attached are detail of my assignment...

Answer 27

I am finished with Q1,Q8,Q5 and Q2....please can you help me on this Jack

Answer 28

sure
so Q3
a is easy enough
just add the cells downwards

Answer 29

so Plan 1 10+11+11+12+12+13=
nd Plan 2 10.3 + 10.6+10.9+11.2+11.5+11.8=

Answer 30

ok

Answer 31

sp plan 1 = 9000 better than just base salary of 10000
nd plan 2 = 6300 better than just base salary of 10000

Answer 32

so plan 1 is better and by 2700
(for a 3 yr period)

Answer 33

next for 5 yrs
so would be:
Plan 1: 10+11+11+12+12+13 + 13 + 14 + 14 + 15=
Plan 2: 10.3 + 10.6+10.9+11.2+11.5+11.8 + 12.1 + 12.4+ 12.7 +13.0=

Answer 34

so how u get the 9000 pls

Answer 35

10+11+11+12+12+13= 69000
-60000 if no raise
= benefit of $9000 over a 3 yr period

Answer 36

ok...thanks..

Answer 37

where you get 60000 if no raise

Answer 38

so plan 1, 5 yrs = 125000
-100000 if no raise
= benefit of 25000 over 5 yrs
so plan 2 = 116500
-100000 if no raise
= benefit of 16500 over 5 years

Answer 39

base salary is $10000 per 6 months, and we're comparing the 2 optional raises
over a 3 yr period, at just the base salary, no raises, u'd earn $60000
over a 3 yr period, with option 1 (+1000/yr), u'd earn $69000
over a 3 yr period, with option 2 (+300/6months), u'd earn $66300

Answer 40

ok...you are so brain box...so smart..thanks alot

Answer 41

all good, n e time

Answer 42

hahaha...ok

Answer 43

so again, over 5 yrs, plan 1 rocks better than plan 2

Answer 44

25000 vs 16500 (5 yrs)

Answer 45

that is quetion 3. I have load it into my flash than re-write it and submit...it a big help you have done..thanks

Answer 46

all good, r u ok with q 6?

Answer 47

but practiced make perfect

Answer 48

no worries, good luck

Answer 49

no please...

Answer 50

My answer Q6.A is $2,028,758.14 Formular used FV=A[(1+i)6n -1]/i

Answer 51

B. $1,022,802.61 same formula

Answer 52

does it right sweet...

Answer 53

i gots roof equals 180611 in 20 yrs time...?

Answer 54

i used the formula i did whay up above tho...?

Answer 55

g2g diner, back later ? soz

Answer 56

hey, im back
k i still think that the cost of the roof (one off payment) is $180,611
using FV=PV×(1+r)^n
so that's what i got for 6a anyway

6b is kinda dependant on what u get for 6a,
but

Answer 57

cool dude, good to c u hey ;)

Answer 58

so 6b i used your formula from whay up above and calculated it out at :
180611 = x ((((1.015)^40)-1)/.015)
so x = $3,328.14 as a semiannual payment

Answer 59

FV=A[ ( {(1+i)^n} - 1 ) /i ]
this was the equation i used to work it out
using i = 0.015
n = 40
and FV = 180611

Answer 60

again, i don't know if its correct dude, i'm rusty when it comes to compound interest formulas hay

Answer 61

dammmit, sorry the annual interest rate on treasuries is 5%, not 3
used the wrong one, standby im recalculating

Answer 62

FV=A[ ( {(1+i)^n} - 1 ) /i ]
this was the equation i used to work it out
using i = 0.025
n = 40
and FV = $180, 611

so
180611 = x ((((1.025)^40)-1)/0.025)
180611 = x (67.4026)
so x = 180611/67.4026
x = 2679.59 = A

Answer 63

yep, a semi-annual payment of $2,679.59 will reach the goal in 20 yrs

Answer 64

so 6a = 180611
6b = 2,679.59

Answer 65

all good dude, good luck with the rest
think u've got Q1, Q2, Q3, Q5, Q6, Q8, , just 4, 7 and 9 to go

Answer 66

I have Q4, but undifind...my formula is r=(1+i/n)-1 just check