1. Oliver Inc. plans to establish a debt retirement fund, beginning December 31.
Contributions of $18,200 are made to a trustee annually, beginning December 31, so that the
desired amount of $90,120 is available in four years, the date of the last payment. Compute the
required interest rate that must be earned by the fund on an annual basis to satisfy these requirements.
2. Polus Inc. decides to create a plant expansion fund by making equal annual deposits of
$40,500 on each January 1. Interest at 10% compounded annually is added to the fund balance
each year-end. How many deposits are required to accumulate a fund of $313,077?