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A sinking fund is set up so that level annual payments will accumulate, at i...

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Finance

A sinking fund is set up so that level annual payments will accumulate, at i %p.a compounding annually, to $50,000 in 10 years. Assuming the payments made are at each year-end, after exactly 5 years the sinking fund will be:

[Note: a sinking fund allows for money to be set aside by periodical deposits in order to accumalte an amout to e.g replace equipment or repay debt due at a future date]

Select one:

a. Greater than $25,000

b. Less than $25,000

c. Equal to $25,000

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