The City of Moose Jaw borrowed $900,000 at 9% c.a. with interest to be paid yearly, the full principal due and payable in 9 years. A sinking fund is established with 9 annual payments to be made earning an estimated 6.5% c.a.. Find the total periodic charge.

The RM of Elbow set up a sinking fund with the objective of having $1,500,000 in 8 years. An examination of the fund just after the 5th year shows the fund contains $845,550. Calculate the required annual contribution for the remaining 3 years if the estimated rate for the remaining 3 years is 7.25% c.a..

Nutrien enters into a long-term debt of $10,000,000 with interest payable semi-annually at 9.5% c.s.a.. The principal payment is due in 10 years. It establishes a sinking fund to earn 8.75% c.s.a. interest on semi-annual deposits.

 What is the effective rate of financing this debt by this method?

Answer rating: 100% (QA)

Solution 1 To find the total periodic charge we need to calculate the annual payments to the sinking fund and the interest payments on the borrowed am... View the full answer