Automated mug producing machine

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Reference no: EM131354266

The Sid Credle Mug Company wants to accumulate enough money over the next 10 years (2017-2026) to pay for the replacement of its digitalized, automated mug producing machine. The new machine is expected to cost $200,000 at the end of 2026. Credle already has $10,000 that he plans to invest to help pay for the new machine. (Credle wants to invest equal amounts into an investment fund at the end of each of the next 10 years (2017-2026) to help pay the new machine; Earnings on all of the investments (the $ 10,000 he already has and the equal yearly investments) are expected to be 7% for the first 5 years (2017-2021) and 9% for the second 5 years (2022-2026).

What equal, end of year amount must Credle invest each year over the next 10 years to meet these needs?

Reference no: EM131354266

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