The ABC County acquired equipment on $1/1/1998$ at a cost of $$200,000.$ The equipment has an estimated life of $5$ years and a scrap value at the end of that time of $15\%.$ A sinking fund is to be created to provide for the replacement of the equipment at the end of $5$ year. The first deposit is to be made to the fund on $12/31/1998.$ It is believed that the fund will earn $4\%$ interest annually. On this basis, actuarial deposit requirements are fund to be $$31,386\mathrm{.}61.$ It is provided that if the earnings of a period should be other than $4\%,$ the deposit made at the end of the period shall be increased for an interest shortage or decreased for an interest overage. Assume that the fund earned $4\mathrm{.}5\%$ during $1999,$ and $4\%$ thereafter until $1/1/2002,$ when the earning rate became $3\mathrm{.}5\%.$

What is the interest accrued on the fund for $1999?$

Answers:

A$.$ $$1,255\mathrm{.}46$

B$.$ $$1,360\mathrm{.}00$

C$.$ $$1,412\mathrm{.}40$

D$.$ $$1,570\mathrm{.}00$

E$.$ $$9,000\mathrm{.}00$

Answer rating: 100% (QA)

From the question we know that the first deposit was made on 123119... View the full answer