Answer:
= $165.991
Explanation:
The deposit each week can be determined using the the sinking fund formula.
A sinking fund is an investment plan where a fixed amount of money is deposited into an interest-yielding account to accumulate a target sum in the future.
Equal deposit = FV/ annuity factor
Annuity factor =((1+r)^(n) - 1)/r
FV = future amount, - $28,000
r - interest rate per period - 5.18%/52 = 0.0996% per week. Remember that there are 52 weeks in a year
n - number of period = 3× 52 = 156 weeks
Annuity factor =( (1 +0.099%)^(156)-1)/0.0996%
= 168.6835499
Deposit per week
= 28,000/ 168.683
= $165.991
FV = A × ((1+r)^(n) - 1)/r
Answer:
$167.26must be deposited each week
Explanation:
Given FV = $28000, n = 3 years, r = 5.8% pmt =?
Use the FV of annuity formula
FV = pmt *[(1+r)^n - 1/r]
We looking for weekly payments made for a period of 3 years
there are 52 weeks in a year
n = 53*3 = 156
r = 5.18/52 =0.0009
Substitutte in the formula
28000= pmt *[(1.0009)^156-1/0.0009]
28000 = pmt (167.40)
pmt = 28000/167.40=$167.26
