Question: Eagle Paving believes that its paving machine will need replacing in 10 years. The president estimates that a new one will cost $500,000 by then.

Eagle Paving believes that its paving machine will need replacing in 10 years. The president estimates that a new one will cost $500,000 by then. The financial officer establishes a sinking fund to finance this future purchase. What equal payments must be made to this fund every three months at 6% compounded quarterly in order to have enough to buy a new paver?

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