Annual deposit for a sinking fund
My company had establish a sinking fund for its outstanding preferred stock issue. $543,219,876 is the total amount that will be retired in 26 years. At the beginning of each of these 26 years, My company will deposit and equal amount into an account that will earns 4%. What is the value of this periodic deposit? Show Computations.
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The periodic deposit would be such that the future value of the deposit is equal to the amount needed in 26 years which hs $543,219,876.
We use the FV of annuity formula. The ...
Solution Summary
The solution explains how to calculate the amount of annual deposit for a sinking fund to retire a preferred stock issue in the future.
$2.19