$550 is deposited monthly for 17 years at 2% per year

Question

Find the amount accumulated FV in the sinking fund.

Answer 1

The sinking fund is an ordinary annuity whose amount you have to find. You can use a formula, spreadsheet function annuity tables or a financial calculator. The calculator is the simplest approach, but you still have to understand annuities and compound interest.. The variables are:

 

PV = 0

PMT = 550

N = 17*12 = 204 months

i% = 2%/12 = .166667%

FV = ?

 

The solution is $133,679.88