A Company Is Setting Up a Sinking Fund to Pay

question 15

Short Answer

A company is setting up a sinking fund to pay off $8,654,000 in bonds that are due in 7 years. The fund will earn 7% interest, and the company intends to put away a series of equal year-end amounts for 7 years. What is the amount of the annual deposits that the company must make?

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Definitions:

Random Assignment

The process of allocating subjects randomly to experimental and control groups in a study to ensure that each participant has an equal chance of being assigned to any group, thus reducing bias.

Correlational Studies

Studies in which the investigator analyzes the relationships among variables that were in place before the study, without manipulating those variables.

Placebo Effects

Observable or measurable changes in health or behavior resulting from the administration of a placebo, demonstrating the power of belief and expectation in the healing process.

Double-blind

A study design in which neither the participants nor the experimenters know who is receiving a particular treatment, to prevent bias in the results.