1 A corporation borrows $5 million to erect a new headquarters The financing is arranged by the use of bonds, to be repaid in 15 years How much should the corporation deposit into a sinking fund at the end of each quarter if the fund earns 2 6 interest compounded quarterly 2 A corporation sets up a...

1 2 The cost of the warehouse in ...

1. A corporation borrows $5 million to erect a new headquarters. The financing is arranged by the...

Question:

1. A borrows $5 million to erect a new headquarters. The financing is arranged by the use of bonds, to be repaid in 15 years. How much should the deposit into a sinking fund at the end of each quarter if the fund earns 2.6% interest compounded quarterly?
2. A sets up a sinking fund to replace an aging warehouse. The cost of the warehouse today would be $8 million. However, the plans to replace the warehouse in 5 years. It estimates that the cost of the warehouse will increase by 5% annually. The sinking fund will earn 3.6% interest compounded monthly. What should be the monthly payment to the fund?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...