# The municipality of Duncan has financed a sewage treatment plant by issuing $18 million worth of sinking

## Question:

a. What equal payments at the end of every six months will be necessary to accumulate $18 million after 15 years if the sinking fund can earn 6.25% compounded semiannually?

b. What is the annual cost of the debt to Duncan taxpayers?

c. Construct a partial sinking fund schedule (including the book value of the debt) showing details of the first three and the last three payments. Debentures

Debenture DefinitionDebentures are corporate loan instruments secured against the promise by the issuer to pay interest and principal. The holder of the debenture is promised to be paid a periodic interest and principal at the term. Companies who... Coupon

A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...

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