SOLUTION: . A ₱1.5M trust fund is created by depositing ₱40,000 quarterly at 16% compounded every three months. a. How many regular deposits are needed? b. How much is in the fund at

Question 1194197: . A ₱1.5M trust fund is created by depositing ₱40,000 quarterly at 16%
compounded every three months.
a. How many regular deposits are needed?
b. How much is in the fund at the end of 4 years?
c. What is the interest earned at the end of 5 years?
d. What is the increase in the fund on the 12th deposit?
e. What additional deposit should be made after the last regular
deposit is made?
f. Construct a sinking fund schedule.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
answers to your questions are below:

a. How many regular deposits are needed?
there would be 22 regular deposits of 40,000 each.

b. How much is in the fund at the end of 4 years?
4*4 = 16 quarters.
the amount of money in the fund at the end of 4 years (16 quarters) is equal to $872,981.25.

c. What is the interest earned at the end of 5 years?
5*4 = 20 quarters.
interest earned at the end of 5 years (20 quarters0) is equal to $391,123.14.

d. What is the increase in the fund on the 12th deposit?
after the 12th deposit, the increase in the fund is equal to $601,032.22 minus $539,454.06 = $61,578.16.
this increase is interest earned of $21,578.16 plus the normal deposit of $40,000.

e. What additional deposit should be made after the last regular
deposit is made?
the additional deposit that should be made after the last regular deposit of 40,000 is equal to $54,796.75.

f. Construct a sinking fund schedule.
sinking fund schedule is shown below.

let me know if you have any questions.
theo

RELATED QUESTIONS
A young man is the beneficiary of a trust fund established for him 16 yr ago at his... (answered by Earlsdon)

A retirement fund earns 8% compounded quarterly. If Php 400 is deposited every three... (answered by ikleyn)

A debtor, who receives a loan of $30, 000, agrees to deposit equal sums at the beginning... (answered by Theo)

You would like to have $41,000 in 5 years for the down payment on a new house following... (answered by ikleyn)

Jessie is the beneficiary of a trust fund established for him 21 years ago at his birth.... (answered by ikleyn)

Question 1 (15 marks) a) Asset X generates a perpetual stream of cash flows of $100,000... (answered by ikleyn)

WORKSHEET 2 Interest Simple Interest Simple Discount Compound Interest Solve for... (answered by ikleyn)

Find the cash price of a property if it is bought for $150,000 down payment and payments... (answered by proyaop)