Blossom Inc. wishes to accumulate $1,198,800 by December 31, 2027, to retire bon

Question

Blossom Inc. wishes to accumulate $1,198,800 by December 31, 2027, to retire bonds outstanding. The company deposits $183,200 on December 31, 2017, which will earn interest at 10% compounded quarterly, to help in the retirement of this debt. In addition, the company wants to know how much should be deposited at the end of each quarter for 10 years to ensure that $1,198,800 is available at the end of 2027. (The quarterly deposits will also earn at a rate of 10%, compounded quarterly.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Annuity of value of quarterly deposits $

Explanation / Answer

Accured amount for $ 183200

A = P*(1+r/100)n

= 183200*(1+4/400)*40

= 491903.70

Balnance required amount = 1198800.00- 491903.70 = 706896.30

Amount to be invested quartely = $ 61557.75

             61,557.75           1,538.94                63,096.69           1,24,654.44           3,116.36             1,27,770.80           1,89,328.55           4,733.21             1,94,061.77           2,55,619.52           6,390.49             2,62,010.01           3,23,567.76           8,089.19             3,31,656.95           3,93,214.70           9,830.37             4,03,045.07           4,64,602.82        11,615.07             4,76,217.89           5,37,775.64        13,444.39             5,51,220.03           6,12,777.78        15,319.44             6,28,097.22           6,89,654.97        17,241.37             7,06,896.35

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