Question: a. i. Set up an amortization schedule for a Tk. 25,000 loan to be reported in equal installments at the end of the next 3

a. i. Set up an amortization schedule for a Tk. 25,000 loan to be reported in equal installments at the end of the next 3 years. The interest rate is 10% compounded annually. ii. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Why do these percentages change over time?

b. AB Ltd. is creating a sinking fund to redeem its preference capital of Tk. 500,000 issued on 6th April 2016 and maturing 5th April 2028. The first annual payment will be made on 6th April 2016. The company will make equal annual payments and expects that the fund will earn 12 percent per year. How much will be the amount of sinking fund payment?

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