Question

Using the sinking fund Table 13.3, complete the following: (Do not round intermediate calculations. Round your answer to the nearest cent.)

Required amount		Frequency of payment	Length of time	Interest rate	Payment amount end of each period
$26,000		Quarterly	5 Years	8%	$

VB... Period 2% 3% 4% 5% 6% 8% 1 1 1.0000 1.0000 1.0000 10000 1.0000 0.4926 1.0000 1.00 2. 0.4951 0.4902 0.4878 0.4854 0.4808 0.47 3 0.3268 0.3235 0.3203 0.3172 0.3141 0.3080 0.30 4 0.2426 0.2390 0.2355 0.2320 0.2286 0.2219 0.215 5 0.1922 0.1884 0.1846 0.1810 0.1774 0.1705 0.1638 6 0.105 0.1546 0.1508 0.1470 0.1434 0.1296 0.1363 0.1121 7 0.1345 1305 0.1266 0.1228 0.1191 0.1054 0.0874 8 0.1165 0.1125 0.1085 0.1047 0.1010 0.0940 9 0.1025 0.0984 0.0945 0.0907 10 0.0913 0.0872 0.0833 0.0795 0.0704 11 0.0781 0.0741 0.0822 0.0746 12 0.0705 0.0666 0.0628 13 0.0640 0.0601 0.0565 14 0.0585 0.0547 0.0510 0.0681 0.0626 0.0578 0.0537 15 0.0538 0.0496 0.0499 0.0458 16 0.0870 0.0801 0.0736 0.0759 0.0690 0.0627 0.0668 0.0601 0.0540 0.0593 0.0527 0.0468 0.0530 0.0465 0.0408 0.0476 0.0413 0.0357 0.0430 0.0368 0.0315 0.0390 0.0330 0.0278 0.0354 0.0296 0.0247 0.0324 0.0267 0.0219 0.0296 0.0241 0.0195 0.0272 0.0219 20175 0.0197 0.0150 0.013 0.0146 0.0105 0.0075 0.010 0.0075 0.0050 0.0084 00053 00033 0.0065 0 0039 0.0023 17 18 0.0500 0.0467 0.0438 19 0.0463 0.0423 0.0387 0.0355 0.0327 0.0302 0.0225 0.0171 0.0133 0.0104 0.0083 20 0.0460 0.0427 0.0398 0.0372 0.0290 0.0233 0.0190 0.0158 0.0133 0.0422 0.0390 0.0361 0.0336 0.0256 0.0200 0.0159 0.0129 0.0105 0.0412 0.0329 0.0270 0.0226 0.0192 0.0166 24 28 32 36 40

Answer 1

Here we have to calculate the amount of annuity which will accumulate $26000.

therefore,

annuity = future value of annuity/FVAF

= $26000/24.29737

= $1070

therefore, payment amount to be made at the end of each period is $1070

where,

interest rate per quarter = 8%/4 = 2%

number of periods = 5 years x 4 quarters per year = 20

FVAF(2%, 20) = 24.29737

NOTE: the table given in question is not the appropriation to solve this auestion