1 . Sepia Inc. issued bonds for $400,000 that were redeemable in 9 years. They established a sinking fund that was earning 4.51% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made to the fund at the end of every 6 months.

a. Calculate the size of the periodic sinking fund deposit.

 

Round your answer up to the next cent

b. Calculate the sinking fund balance at the end of the payment period 14.

 

Round to the nearest cent

c. Calculate the interest earned in payment period 15.

 

Round to the nearest cent

d. Calculate the amount by which the sinking fund increased in payment period 15.

 

Round to the nearest cent

 

2. General Computers Inc. purchased a computer server for $68,500. It paid 45.00% of the value as a down payment and received a loan for the balance at 6.50% compounded semi-annually. It made payments of $2,100.43 at the end of every quarter to settle the loan.

a. How many payments are required to settle the loan?

payments

Round up to the next payment

b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places.

Payment Number	Payment	Interest Portion	Principal Portion	Principal Balance
0				$37,675.00
1
2
: :	: :	: :	: :	: :
: :	: :	: :	: :	: :
				0.00
Total

 

3. Maria received a loan of $35,000 at 5.75% compounded semi-annually. He had to make payments at the end of every half-year for a period of 6 years to settle the loan.

a. Calculate the size of payments.

 

Round to the nearest cent

b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places.

Payment Number	Payment	Interest Portion	Principal Portion	Principal Balance
0				$35,000.00
1
2
: :	: :	: :	: :	: :
: :	: :	: :	: :	: :
				0.00
Total

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Business Mathematics Formulas (Vretta Text) Simple Interest I = Prt Compound Interest i = j m S = P(1+rt) n=mxt FV=PV (1+i)" f=(1+i)m 1 Annuities PV=FV (1+i)" =(1+4)-1 FV = PMT (1+i)" =(1+i)-1 FV Due = PMT PV Perp PMT i Bonds = i n +i) -n Bond price=b(FV) 1-(1+i) i PV=PMT 1-(1+i) i C= Number of compounding periods per year Number of payments per year PV -n (1+i) = PMT Due (1+i) i PMT PV Perp Due (1+i) i + FV (1+i) Business Mathematics Formulas (Vretta Text) Simple Interest I = Prt Compound Interest i = j m S = P(1+rt) n=mxt FV=PV (1+i)" f=(1+i)m 1 Annuities PV=FV (1+i)" =(1+4)-1 FV = PMT (1+i)" =(1+i)-1 FV Due = PMT PV Perp PMT i Bonds = i n +i) -n Bond price=b(FV) 1-(1+i) i PV=PMT 1-(1+i) i C= Number of compounding periods per year Number of payments per year PV -n (1+i) = PMT Due (1+i) i PMT PV Perp Due (1+i) i + FV (1+i)