Question

New parents wish to save for their newborn's education and wish to have $30,000 at the end of 18 years. How much should the parents place at the end of each year into a savings account that earns an annual rate of 7% compounded annually? (Round your answers to two decimal places.) $ 882 38 How much interest would they earn over the life of the account? $ 14117.16 Determine the value of the fund after 10 years. $ 12191.36 How much interest was earned during the 10th year? $ 1622.22 X Additional Materials eBook Submit Answer Practice Another Version -16 points V T EAFM2 F.3.026. My Notes A corporation creates a sinking fund in order to have $490,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each quarter if the annual interest rate is 4.5% compounded quarterly? (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 fourth quarter of the 6th year? Additional Materials Rank

Answer 1

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Function Arguments ? X IPMT Rate 7% Per 10 Nper 18 Pro FV 30000 1 1 1 = 0.07 = 10 = 18 1 = 30000 = 739.8380047 Returns the interest payment for a given period for an investment, based on periodic, constant payments and a constant interest rate. Fv is the future value, or a cash balance you want to attain after the last payment is made. If omitted, Fv = 0. Formula result = $ 739.84 Help on this function D OK Cancel

Hence, Interest earned in 10th year was $739.84

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