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Homework answers / question archive / Please assist me with this problem In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period
Please assist me with this problem
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.
Find the amount of time needed for the sinking fund to reach the given accumulated amount. (Round your answer to two decimal places.)
$2500 yearly at 6% to accumulate $100,000.
yr
Computation of Time Needed using NPER Function in Excel:
=nper(rate,pmt,-pv,fv)
Here,
NPER = Number of Periods or Time Needed = ?
Rate = 6%
PMT = $2,500
PV = 0
FV = $100,000
Substituting the values in formula:
=nper(6%,2500,0,-100000)
NPER or Number of Periods or Time Needed = 21 years
