business math
posted by Valerie on .
I'm trying to solve this problem: What sinking fund payment would be required at the end of each threemonth period, at 8% interest compounded quarterly, in order to amount to 20,000. I just need to know how to work the problem correctly.

you didn't give a time limit for the $20,000, so I'll assume 5yrs
FV = PMT * (((1 + i)^n  1)/i )
x = amt of PMT
i = rate
n = no. of payments
i = .08/4 quarters = .02
n = 4 * 5 yr = 20 payments
20,000 = x *((1 + .02)^20  1 )/.02
20,000 = x *(( 1.02 )^20  1)/ .02
20,000 = x *(1.48595  1)/.02
20,000 = x * (0.48595)/.02
20,000 = 0.48595x/.02
400 = 0.48595x
x = 823.13
PMT = x = $823.13