Question
Part 1: In 2013, Barrick Gold, a Canadian mining company, adopted a plan to accumulate a remediation fund beginning Aug. 2, 2018 at an estimated
Part 1: In 2013, Barrick Gold, a Canadian mining company, adopted a plan to accumulate a remediation fund beginning Aug. 2, 2018 at an estimated cost of $32 million. Barrick plans to make equal semiannual payments into a fund earning 5.2% interested compounded semiannually. The first deposit is scheduled for Aug. 1, 2013. Determine the required semiannual deposit. First determine how many payments Barrick will be making. Assume the last payment is made on Feb. 1, 2018 but the funds are not needed until Aug. 1, 2018.
N = I/Y = PV = PMT = FV =
Part 2: Assume the same facts as in part 1, except on Feb. 1, 2016, due to financial problems, Barrick deposit nothing in the fund. After this date, they resume and make sufficient equal payments to meet their goal of $32 million on Aug. 1, 2018. In other words, they make the same amount of payments in the fund as part 1 from Aug. 1, 2013-Aug. 1, 2018. Determine the first set of required payments and the second set of required payments.
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