Sepia Inc. issued bonds for $475,000 that were redeemable in 6 years. They established a sinking fund that was earning 5.37% 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 6. Round to the nearest cent c. Calculate the interest earned in payment period 7. d. Calculate the amount by which the sinking fund increased in payment period 7. Round to the nearest cent

Sepia Inc. issued bonds for $475,000 that were redeemable in 6 years. They established a sinking fund that was earning 5.37% 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 6. Round to the nearest cent c. Calculate the interest earned in payment period 7. d. Calculate the amount by which the sinking fund increased in payment period 7. Round to the nearest cent

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

Problem 1PS

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A company deposited $5,500 into an investment fund at the beginning of every quarter for 6 years. It then stopped making deposits into the fund and allowed the investment to grow for 6 more years. The fund was growing at 5.25% compounded monthly. a. What was the accumulated value of the fund at the end of 6 years? Round to the nearest cent b. What was the accumulated value of the fund at the end of 12 years? Round to the nearest cent c. What was the amount of interest earned over the 12-year period? Round to the nearest cent
$2,950 was deposited at the end of every six months for 8 years into a fund earning 4.5% compounded semi-annually. After this period, the accumulated money was left in the account for another 7 years at the same interest rate. a) Calculate the accumulated amount at the end of the 15-year term. $ b) Calculate the total amount of interest earned during the 15-year period.
A company deposited $14,500 into an investment fund at the beginning of every quarter for 7 years. It then stopped making deposits into the fund and allowed the investment to grow for 5 more years. The fund was growing at 3.50% compounded monthly. a. What was the accumulated value of the fund at the end of 7 years ? $0.00 Round to the nearest cent b. What was the accumulated value of the fund at the end of 12 years ? S0.00 Round to the nearest cent c. What was the amount of interest earned over the 12-year period? S0.00 Round to the nearest cent SA
A company plans to make four annual deposits of $2,250 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $2,250 annual deposit are made at the end of each of the four years and interest is compounded annually. 2. The $2,250 annual deposit are made at the beginning of each of the four years and interest is compounded annually. 3. The $2,250 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly. 4. The $2,250 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year. Complete this question by entering…
Alp Bilgin deposits $33.000 in asaving account that pays 9%interest compounded monthly.Four years later, he deposits $20.000. Three years after the20.000 deposit, he makesanother deposit in the amount of$16.500. Six years after the $16.500, half of the accumulatedfunds are transferred to a fundthat pays 12% interestcompounded quarterly. Howmuch money will be in accounteight years after the transfer?
$4,250 was deposited at the end of every six months for 5 years into a fund earning 2.2% compounded semi-annually. After this period, the accumulated money was left in the account for another 4 years at the same interest rate. a) Calculate the accumulated amount at the end of the 9-year term. $ b) Calculate the total amount of interest earned during the 9-year period.
Cameron deposited $1,400 at the end of every month into an RRSP for 8 years. The interest rate earned was 3.50% compounded semi-annually for the first 3 years and changed to 3.75% compounded monthly for the next 5 years. What was the accumulated value of the RRSP at the end of 8 years? $0.00 Round to the nearest cent

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