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Annual sinking fund

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?

How do I set this up to calculate?

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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 ...

Solution Summary

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