SECTION B (14 marks) Answer all questions. 1. A debt of RM 10,600 is bearing interest at 6.5% compounded quarterly is to be discharged by the sinking fund method. If nine equal quarterly deposits, the first due in three months, are made into a fund that pays 4.5% compounded quarterly, (a) Find the size of each quarterly deposit. (b) Find the quarterly cost of the debt. (7 marks) SERI (1+i)" -1 i FORMULAE 1-(1+i)" I = S-OR A =R i I=nR-A Periodic Cost = Periodic Interest Payment +Periodic Deposit S = P(1+i)" Periodic Cost = Pi +R