Chapter 1 Problem 13-16 to 20
Problem 13-16 Answer D
Annual deposit (8,000,000 / 4.78) 1,673,640
Problem 13-17 Answer B
Annual deposit (9,000,000 / 6.34) 1,419,560
Problem 13-18 Answer A
Principal amount 5,000,000
Multiply by future value of 1 for 6 periods at 10% 1.77
Future amount at maturity 8,850,000
Problem 13-19 Answer A
Future amount of maturity 7,160,000
Divide by future value of 1 for 10 periods at 6% 1.79
Initial investment 4,000,000
The annual interest of 12% is compounded semiannually for 5 years. Therefore, there are
10 interest periods at 6%.
Problem 13-20 Answer A
Sinking fund balance – January 1 4,500,000
Add: 2007 investment 900,000
Dividends on investment 150,000
Interest revenue 300,000 1,350,000
Total 5,850,000
Less: Administration costs 100,000
Sinking fund balance – December 31 5,750,000
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