Posted by Valerie on Friday, January 14, 2011 at 7:30pm.
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.

business math  helper, Friday, January 14, 2011 at 9:10pm
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
Answer This Question
Related Questions
 math for business and finance  What sinking fund payment would be required at ...
 Math sinking payment  Could some one please explian What is a sinking fund ...
 math  What sinking fund payment would be required at the end of each three...
 math for busness and finance  what sinking fund payment would be required at ...
 Finance  Loans problem please help  A company borrows $170000, which will be ...
 Please Help me with a Finance  Loan problem  A company borrows $170000, which ...
 Finance  Loans problem  Reiny the answer 307.33 you posted at the bottom is ...
 Finance  Loans problem  Can someone please explain how this problem is laid ...
 Finance  Loans problem  A company borrows $170000, which will be paid back to ...
 Math Finance  Word problem asks to find rate of interest on a monthly deposit ...
More Related Questions