Question: Question 10: A sinking fund is to be created for the purchase of an equipment in 4 years. The current cost of the equipment is

Question 10:

A sinking fund is to be created for the purchase of an equipment in 4 years. The current cost of the equipment is 10,000. Calculate the annual amount that should be paid into the sinking fund if the cost of the equipment is expected to increase by 2% per year over the next 4 years, assuming an interest rate of 5% per year. (4 units)

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