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Annuity for Sinking Fund

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Acme has decided to establish a sinking fund for its outstanding preferred stock issue. $975318642 represents the amount of the issue that will be retired in 26 years. At the beginning of each of these 26 years, Acme will deposit an equal amount into an account that earns B% (B = 7) What is the value of this periodic deposit?

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Solution Preview

FV= $975,318,642
NPER= 26
I= 7%
PV= 0

PMT= $13,272,563 (using EXCEL function PMT) =PMT(C7,C6,C8,-C5,1)
(use annuity due as deposits are at the beginning of the ...

Solution Summary

The solution calculates the value of this periodic deposit into a sinking fund for outstanding preferred stock issue.

$2.19