Question
a) Indigo Corporation purchased a special tractor on December 31, 2020. The purchase agreement stipulated that Indigo should pay $18,650 at the time of purchase
a) Indigo Corporation purchased a special tractor on December 31, 2020. The purchase agreement stipulated that Indigo should pay $18,650 at the time of purchase and $5,190 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2020, at what amount, assuming an appropriate interest rate of 12%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
b) Indigo Corporation wants to withdraw $123,180 (including principal) from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)
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