Sepia Inc. issued bonds for $450,000 that wereredeemable in 6 years. They established a sinking fundthat was earning 4.87% compounded semi-annually topay back the principal of the bonds on maturity.Deposits were being made to the fund at the end ofevery 6 months.a. Calculate the size of the periodic sinking funddeposit.b. Calculate the sinking fund balance at the end of thepayment period 8.c. Calculate the interest earned in payment period 9.d. Calculate the amount by which the sinking fundincreased in payment period 9.

Sinking funds are established to provide and collect money for future liabilities and periodic…

Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinki that was earning 4.87% compounded semi-ann pay back the principal of the bonds on maturity. Deposits were being made to the fund at the en- every 6 months. a. Calculate the size of the periodic sinking fund deposit.

Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinki that was earning 4.87% compounded semi-ann pay back the principal of the bonds on maturity. Deposits were being made to the fund at the en- every 6 months. a. Calculate the size of the periodic sinking fund deposit.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 20P

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