Compute how much must be contributed each year by company

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Reference no: EM131854774

ABC Company borrowed $120,000 on July 1, 2017. This amount plus accrued interest at 8% compounded semiannually is to be repaid in total on July 1, 2027. To retire this debt, ABC Company plans to contribute to a debt retirement fund five equal amounts starting on July 1, 2022 and continuing for the next four years. The fund is expected to earn 6% per annum.

Compute how much must be contributed each year by the company to provide a fund sufficient to retire the debt on July 1, 2027?

Reference no: EM131854774

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