Sepia Inc. issued bonds for $325,000 that were redeemable in 5 years. They established a sinking...

Sepia Inc. issued bonds for $325,000 that were redeemable in 5 years. They established a sinking fund that was earning 3.79% 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.

Round to the nearest cent

d. Calculate the amount by which the sinking fund increased in payment period 7.

Round to the nearest cent

Expert Solution

a) Size of the periodic sinking fund deposit is $29,823.89

b) Sinking fund balance at the end of the payment period 6 is $191,193.78

c) Interest earned in payment period 7 is $4,188.28

d) Amount by which sinking fund increased in payment period 7 is $34,012.17

The same with Excel Formulas shown:

jeff jeffy answered 1 year ago

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Sepia Inc. issued bonds for $325,000 that were redeemable in 5 years. They established a sinking...

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