Jesper Parnevik borrowed $90,510 on March 1, 2012. This amount plus accrued inte

Question

Jesper Parnevik borrowed $90,510 on March 1, 2012. This amount plus accrued interest at 12% compounded semiannually is to be repaid March 1, 2022. To retire this debt, Alex plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2017, and for the next 4 years. The fund is expected to earn 10% per annum.

How much must be contributed each year by Jesper Parnevik to provide a fund sufficient to retire the debt on March 1, 2022?

Jesper Parnevik borrowed $90,510 on March 1, 2012. This amount plus accrued interest at 12% compounded semiannually is to be repaid March 1, 2022. To retire this debt, Alex plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2017, and for the next 4 years. The fund is expected to earn 10% per annum. How much must be contributed each year by Jesper Parnevik to provide a fund sufficient to retire the debt on March 1, 2022?

Explanation / Answer

100 000 x FVF (10,12%) =310 585

310 585=RENT X FVF

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