Question

Find the amount of each payment to be made into a sinking fund earning 55​% compounded monthly to accumulate ​$42,000 over 77 years. Payments are made at the end of each period.

The payment size is $

Answer 1

`$4.3643340396×10^(-14)`

Explanation:

Formula of sinking fund =
`P=(A)/((1+(r)/(n))^(nt)-1)`

A = Accumulated amount = $42,000

t = time = 77 year

Since we are given that fund earning 55​% compounded monthly to

n = no. of compounds = 12

Substitute the values in the formula :

`P=(42000 )/((1+(55)/(1200))^(77 * 12)-1)`

`P=(42000 )/((1+(55)/(1200))^(924)-1)`

`P=4.3643340396×10^(-14)`

Hence The payment size is
`$4.3643340396×10^(-14)`