Sepia Inc. issued $325,000 bonds that were redeemable in 7 years. They established a sinking fund that was earning 3.25% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made into the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposits. $0.00 Round up to the next cent b. Calculate the sinking fund balance at the end of the 4th payment period. $0.00 Round to the nearest cent c. Calculate the amount of interest earned during the 5th payment period. $0.00 Round to the nearest cent. d. Calculate the amount by which the sinking fund increased in the 5th payment period. $0.00 Round to the nearest cent.
Sepia Inc. issued $325,000 bonds that were redeemable in 7 years. They established a sinking fund that was earning 3.25% compounded semi-annually to pay back the principal of the bonds on maturity. Deposits were being made into the fund at the end of every 6 months. a. Calculate the size of the periodic sinking fund deposits. $0.00 Round up to the next cent b. Calculate the sinking fund balance at the end of the 4th payment period. $0.00 Round to the nearest cent c. Calculate the amount of interest earned during the 5th payment period. $0.00 Round to the nearest cent. d. Calculate the amount by which the sinking fund increased in the 5th payment period. $0.00 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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Transcribed Image Text:Sepia Inc. issued $325,000 bonds that were redeemable in 7 years. They established a
sinking fund that was earning 3.25% compounded semi-annually to pay back the
principal of the bonds on maturity. Deposits were being made into the fund at the end
of every 6 months.
a. Calculate the size of the periodic sinking fund deposits.
$0.00
Round up to the next cent
b. Calculate the sinking fund balance at the end of the 4th payment period.
$0.00
Round to the nearest cent
c. Calculate the amount of interest earned during the 5th payment period.
$0.00
Round to the nearest cent.
d. Calculate the amount by which the sinking fund increased in the 5th payment period.
$0.00
Round to the nearest cent.
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