Homework Help: Math

Posted by Anonymous on Friday, November 11, 2011 at 4:43pm.

Jeff Associates borrowed $30,000. The company plans to set up a sinking fund that will repay the loan at the end of 8 years. Assume a 12 % interest rate compounded semiannually. What must Jeff pay into the fund each period of time?

Math - Reiny, Friday, November 11, 2011 at 5:03pm
let P be the payment

30000 = P(1.06^16 - 1)/.06

solve for P
OOPS, (sorry Rick Perry) Math - Reiny, Friday, November 11, 2011 at 5:04pm
that should have been

30000 = P(1 - 1.06^-16)/.06

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