A manufacturer of industrial grade gas handling equipment wants to have $575,000 in an equipment replacement...
A manufacturer of industrial grade gas handling equipment wants to have $575,000 in an equipment replacement contingency fund 10 years from now. If the company plans to deposit a uniform amount of money each year beginning now and continuing through year 10 (total of 11 deposits), what must be the size of each deposit? Assume the account grows at a rate of 9% per year.
The size of each deposit should be $
Homework Answers
Ans: The size of each deposit should be $32717.5
Explanation:
F = $575,000
i = 9%
n = 11
A = F ( A/ F , i ,n )
= $575,000 ( A/ F , 9% ,11 )
= $575,000 ( 0.0569 )
= $32717.5
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