Math
posted by Anonymous .
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?

let P be the payment
30000 = P(1.06^16  1)/.06
solve for P 
that should have been
30000 = P(1  1.06^16)/.06 
$30,000
End of 8 years
12% interest
8*2= 16 periods
12/2= 6%
Go to the table in your math procedures book and look under sinking fund table (Practical Business Math Procedures Jeffery Slater/ Sharon M. Whittry 12th edition Page 12.)
table =.0390
$30,000 * .0390= $1170.00
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