Starr Company decides to establish a fund that it will use 2 years from now to r

Question

Starr Company decides to establish a fund that it will use 2 years from now to replace an aging production facility. The company will make a $95,000 initial contribution to the fund and plans to make quarterly contributions of $43,000 beginning in three months. The fund earns 16%, compounded quarterly. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "Table Factor" to 4 decimal places and final answer to the nearest whole dollar.) What will be the value of the fund 2 years from now? fund2years from noes n te Table Values are Based on: n a Present ValueTable Factor Future Value Initial Investment Periodic Investments Future Value of Fund

Explanation / Answer

Tables value based on n 2*4=8 i 16/4 = 4% Present value Tabe factor Future value Initial investment 95000 1.3686 130017 Periodic investment 43000 9.2142 396211 Future value of fund 526228

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