Exercise 6-16

Morgan Fowler borrowed $91,860 on March 1, 2015. This amount plus accrued interest at 6% compounded semiannually is to be repaid March 1, 2025. To retire this debt, Morgan plans to contribute to a debt retirement fund five equal amounts starting on March 1, 2020, and for the next 4 years. The fund is expected to earn 5% per annum. Click here to view factor tables How much must be contributed each year by Morgan Fowler to provide a fund sufficient to retire the debt on March 1, 2025? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,583.)

Annual contribution to debt retirement fund