Exercise 6B-16 Your answer is incorrect. Try again. Tony Fowler borrowed $94,020

Question

Exercise 6B-16 Your answer is incorrect. Try again. Tony Fowler borrowed $94,020 on March 1, 2015. This amount plus accrued interest at 10% compounded semiannually is to be repaid March 1, 2025. To retire this debt, Tony plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2020, and for the next 4 years. The fund is expected to earn 9% per annum. Click here to view factor tables How much must be contributed each year by Tony Fowler to provide a fund sufficient to retire the debt on March 1, 2025? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,583.) Annual contribution to debt retirement fund 39324

Explanation / Answer

Annual Contribution to Debt Retirement Fund is $ 38,242 ( Every year the opening amount will earn 9% Return and a new contrubution of $ 38,242 so on for five Years that will make Earning from the fund $ 249645)

Total Amount Payable at the end of ten years for Debt is $ 249,643 (Comput Semiannuall thats means interest on interest will be calculated on the Interest component also)

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