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Annual sinking fund

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Gordon Company issued $1,000,000, 10 year bonds and agreed to make annual sinking fund deposits of $80,000. The deposits are made at the end of each year into an account paying 5% annual interest. What amount will be in the sinking fund at the end of 10 years?

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The solution explains how to calculate the future value of sinking fund payments.

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The deposits in the sinking fund are in the nature of an annuity. We need to find the future value of this ...

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