Use the Sinking Fund Formula to Determine the Payment Needed

question 167

Multiple Choice

Use the sinking fund formula to determine the payment needed to reach the accumulated amount. Round the answer to
the nearest cent.
-Annual payments with 6.5% interest compounded annually for 23 years to accumulate$4000

• A) $73.59
• B) $61.08
• C) $86.76
• D) $79.84

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Definitions:

Total Consumption

The aggregate amount of goods and services consumed by individuals, households, and others in an economy during a given period.

Consumption Function

An economic formula representing the relationship between total consumption and gross national income.

Income Rises

An increase in the amount of money received by households or individuals over a period of time.

Level Of Consumption

The total amount of goods and services consumed by households over a certain period.