Your answer is incorrect. Try again. Bates Company issued $1,400,000, 12-year bo

Question

Your answer is incorrect. Try again. Bates Company issued $1,400,000, 12-year bonds and agreed to make annual sinking fund deposits of $80,500. The deposits are made at the end of each year into an account paying 7% annual interest. Click here to view the factor table (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 12 years? (Round answer to 2 decimal places, e.g. 25.25.) Amount in the sinking fund 1439340

Explanation / Answer

Future value of annuity=Annuity[(1+rate)^time period-1]/rate

=80500[(1.07)^12-1]/0.07

=$80500*17.88845

which is equal to

=$1,440,020.23(Approx).

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.