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Your company will be buying new equipment starting 6 years from today. The equipment will cost $2,500,000 payable in five equal annual installments....

12.  Your company will be buying new equipment starting 6 years from today. The equipment will cost $2,500,000 payable in five equal annual installments. Already the company has set aside $500,000. How much additional does the company need to set aside each year over the next 5 years assuming it can earn 7% interest? (Treat this as an ordinary annuity.) 

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Additional amount the company need... View the full answer

2 comments
  • This is what it given as answer how do I get this answer by using the TI 84? PV5 = $2.05M (present value of $0.5/yr for 5 yrs @ 7%) FV5 = $0.70M (future value of $0.5m, @7% for 5 years) FV5 = $1.35M future value of ? @ 7% for 5 years = $0.23M/yr
    • saradinku1
    • Nov 04, 2018 at 11:35am
  • My apologies, I am well versed with the equation and excel method, not the calculator. You can try the PMT calculation by input similar to the excel method shown in method 2 as FV is 2.5 million, PV is 0.5 nper 5yrs rate 7%
    • payaljain3
    • Nov 04, 2018 at 7:48pm

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