Company plans to start sinking fund

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Reference no: EM131074934

A company plans to start a sinking fund so that it will have money to purchase a new 18-wheeler ten years from now. The cost of the truck is expected to be $200,000 and the company uses an interest rate of 10% per year.

1. If the company makes the first deposit three years from now, how much must each one be in order to have the money at the end of year ten?

2. If the company makes the first deposit one year from now, how much should each deposit be?

Reference no: EM131074934

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