Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after 20 years Interest earned by the fund is 8% compounded semi-annually (a) What is the semi-annual interest payment on the debt? (b) What is the size of the semi-annual deposits into the sinking fund? (c) What is the total annual cost of the debt? (d) What is the interest earned by the fund in the 32nd payment interval? (e) What is the book value of the debt after 16 years? (1) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals (a) The interest payment is $ (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after 20 years Interest earned by the fund is 8% compounded semi-annually (a) What is the semi-annual interest payment on the debt? (b) What is the size of the semi-annual deposits into the sinking fund? (c) What is the total annual cost of the debt? (d) What is the interest earned by the fund in the 32nd payment interval? (e) What is the book value of the debt after 16 years? (1) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals (a) The interest payment is $ (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment
of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after
20 years Interest earned by the fund is 8% compounded semi-annually
(a) What is the semi-annual interest payment on the debt?
(b) What is the size of the semi-annual deposits into the sinking fund?
(c) What is the total annual cost of the debt?
(d) What is the interest earned by the fund in the 32nd payment interval?
(e) What is the book value of the debt after 16 years?
(f) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals.
(a) The interest payment is $
(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed)
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