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A business must raise $60,000 in 8 years. What should be the size of the owners'...

A business must raise $60,000 in 8 years. What should be the size of the owners' quarterly payment to a sinking fund paying 3% compounded quarterly? (Round your answer to the nearest cent.)

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Answer #1

Solution:- Given in Question-

Fund raise = $60,000

Year = 8 year

Rate = 3%

Quarterly Rate = 3% / 4 = 0.75%

Year in Quarter = 8 * 4 = 32 Quarter

First we need to calculate present value Annuity Factor-

Present Value Annuity Factor =

Present Value Annuity Factor =

Present Value Annuity Factor =

Present Value Annuity Factor = 28.35565

To Calculate Size of the owners' quarterly payment -

Size of the owners' quarterly payment =

Size of the owners' quarterly payment =

Size of the owners' quarterly payment = $2,115.98

If you have any query related to question then feel free to ask me in a comment. Thanks. Please rate.

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