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11 July, 18:25

The Math department also purchased a printer. After 4 years, it will have a salvage value of $200. A new printer is expected to cost $2000. The department established a sinking fund in order to provide money for the difference between the cost and the salvage value. If the fund earns 6% compounded semiannually, determine the size of payments.

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  1. 11 July, 18:35
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    determine the size of payments.

    $202,42

    Explanation:

    Expected cost 2000

    Salvage value old printer 200

    Cost requirement 1800

    FVOrdinary Annuity =C * (1+i) n-1/i

    1800=c * (1+3%) >8-1/i

    C=202,42

    N Monthly % VF

    0 202,4214999 1,00 202,42

    1 202,4214999 1,06 214,57

    2 202,4214999 1,12 227,44

    3 202,4214999 1,19 241,09

    4 202,4214999 1,26 255,55

    5 202,4214999 1,34 270,89

    6 202,4214999 1,42 287,14

    7 202,4214999 1,50 304,37
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