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.

Question

Eve Singleton

Business

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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Maci Haney · Answer 1

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