XXXX Contractors are preparing to replace critical earthmoving plant and equipment so that they can consolidate future bids. The anticipated cost of the digger with a maximum-sized bucket is 85,000. It needs to be bought in 4 years time. However, the industrial development fund is willing to loan XXXX contractors at a rate of 12% per annum if they can purchase the digger today. The accountant thinks there is a possibility of outright purchase of the digger in 4 years time if the company can create a sinking fund at a rate of 6% per annum

TASK: Calculate the cost of finance to purchase the digger for 85,000 using the loan from the industrial development fund.