Sepia Inc. issued bonds for $325,000 that were redeemable in 10 years. They established a sinking fund that was earning 4.24% 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.

b. Calculate the sinking fund balance at the end of the payment period 16.

c. Calculate the interest earned in payment period 17.

d. Calculate the amount by which the sinking fund increased in payment period 17.

Answer rating: 100% (QA)

Sepia Incs Sinking Fund Analysis Given Bond issuance amount 325000 Maturity 10 years 20 semiannual periods Sinking fund interest rate 424 compounded s... View the full answer