# Jerry Higgins bought a rare stamp for his collection. He agreed to pay a lump sum of $4000 after 5

## Question:

Jerry Higgins bought a rare stamp for his collection. He agreed to pay a lump sum of $4000 after 5 years. Until then, he pays 6% interest, compounded semiannually.

a. Find the amount of each semiannual interest payment.

b. Jerry sets up a sinking fund so that enough money will be present to pay off the $4000. He wants to make annual payments into the fund. The account pays 8% compounded annually. Find the amount of each payment into the fund.

c. Prepare a table showing the amount in the sinking fund after each deposit.

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## Step by Step Answer:

**Related Book For**

## Calculus With Applications

**ISBN:** 9780321831101

10th Edition

**Authors:** Margaret L Lial, Raymond N Greenwell, Nathan P Ritchey

**Question Details**

Chapter #

**12**- Sequences and SeriesSection: Exercises 12.2

Problem: 42

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