Question

A supplier of certain suspension system parts for General Motors wants to have a contingency fund that it can draw on during down periods of the economy. The company wants to have $10 million in the fund 5 years from now. If the company deposits $1million now, what uniform amount must it add at the end of each of the next 5 years to reach its goal if the fund earns a rate of return of 10% per year ,is closest to ?

A.

$ -1304200

B.

$ -1370200

C.

$ -1374200

D.

$ -1372200

Answer 1

Ans: c) $ 1,374,200