Question

A corporation creates a sinking fund in order to have $670,000 to replace some machinery in 8 years. How much should be placed in this account at the end of each month if the annual interest rate is 6.5% compounded monthly? (Round your answers to the nearest cent.)
$

How much interest would they earn over the life of the account?
$

Determine the value of the fund after 2, 4, and 6 years.

2 years		$
4 years		$
6 years		$

How much interest was earned during the second month of the 7th year?
$

5. + -16 points TEAFM2 F.3.026. My Notes A corporation creates a sinking fund in order to have $670,000 to replace some machinery in 8 years. How much should be placed in this account at the end of each month if the annual interest rate is 6.5% compounded monthly? (Round your answers to the nearest cent.) How much interest would they earn over the life of the account? Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the second month of the 7th year? Submit Answer Practice Another Version

Answer 1

1.
=670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)=5339.60918056332

2.
=670000-670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)*12*8=157397.518665921

3.
=670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)*1/(6.5%/12)*((1+6.5%/12)^(12*2)-1)=136459.643320511

4.
=670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)*1/(6.5%/12)*((1+6.5%/12)^(12*4)-1)=291809.249458764

5.
=670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)*1/(6.5%/12)*((1+6.5%/12)^(12*6)-1)=468663.735811384

6.
=670000*(6.5%/12)/((1+6.5%/12)^(12*8)-1)*1/(6.5%/12)*((1+6.5%/12)^(73)-1)*(6.5%/12)=2581.26884