SOLUTION: A sinking fund is established to obtain $75,000 in five years. The interest rate is 10% and payments are made quarterly. Find the periodic payments? Here is what I have dome

Question 85841: A sinking fund is established to obtain $75,000 in five years. The interest rate is 10% and payments are made quarterly. Find the periodic payments?

Here is what I have dome so far.

I am using the formula A=R * (1+i)^n -1 / i

I am using 0.10/5 = .02 as i

I am using (quarterly means 4)* 5 years = 20 as n

in the formula.. .02 + 1 = 1.02
1.02^20 = 27.8628559 (am I correct in this sum??)-1 = 27.8628558

27.8628558/.02 = 1393.14279

75000 / 1393.14279 = 53.83511334

WHAT AM I DOING WRONG??? My possible answers to this problem are

A. 3,750
B. 2,936.03
C. 2,500
D. 2,148.65
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
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