A yacht club has just replaced its marina at a cost of 8.5 million. The marina is expected to have a useful life of 30 years and no salvage value. The yacht club is establishing a "sinking fund" for the purchase of a new marina in 30 years. Research indicates on average the cost of construction increases 5% each year. The club can earn about 5% in a conservative investment account on its monthly deposits. How much must the club deposit into the sinking fund at the beginning of each month to meet its marina replacement cost?
Following examples of similar problems I got started but hit a wall on the last step... I'm not sure how to calculate "s double-dot angle" equations... Is there another way to calculate this same equation?
Step one: 8,500,000 * (1.05)^30 = 36,736,510.19
I know... AV = 36,736,510.19 n = 360 i = .4074%
AV = X (s (double-dot) angle n at i
I'm not sure how to tackle this type of problem... Can someone show me another way to get the answer. From what I read the "s double-dot" has to do with payment going in to the account happening at the beginning of the month.