Alex Hardaway borrowed $90,000 on March 1, 2010. This amount plus accrued interest at 12% compounded semiannually
Question:
Alex Hardaway borrowed $90,000 on March 1, 2010. This amount plus accrued interest at 12% compounded semiannually is to be repaid March 1, 2020. To retire this debt, Alex plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2015, and for the next 4 years. The fund is expected to earn 10% per annum.
Instructions
How much must be contributed each year by Alex Hardaway to provide a fund sufficient to retire the debt on March 1, 2020?
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