A company has a debt of 11000 due in 5 years How much money

A company has a debt of $11,000 due in 5 years. How much money must it deposit at the end of each half-year into a sinking fund at 9% interest compounded semi-annually in order to pay off the debt.(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Solution

Value of money due in 5 years = 11000

Hence at the end of 5 years the final amount must be 11000

If 100 deposited semianuually for 5 years at 9% final amount =642.06

Hence to get 10000 amount to be deposited = 10000*100/642.06 = 1557.49