Question: Sepia Inc. issued bonds for $ 3 2 5 , 0 0 0 that were redeemable in 1 0 years. They established a sinking fund

Sepia Inc. issued bonds for $325,000 that were redeemable in 10 years. They established a sinking fund that was earning 5.32% 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 16.
Round to the nearest cent
c. Calculate the interest earned in payment period 17.
Round to the nearest cent
d. Calculate the amount by which the sinking fund increased in payment period 17.
Round to the nearest cent

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!