A developer has approached city hall to arrange a bond issue of $1,000,000 to finance the...
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A developer has approached city hall to arrange a bond issue of $1,000,000 to finance the construction of a local development project. The developer will be required to make monthly interest only payments at the bond rate of 6% per annum, compounded semi-annually. Since the total principal must be repaid upon maturity of the loan (5 years), sinking fund payments will be made monthly at a rate of 2.5% per annum, compounded semi-annually. These periodic payments will accumulate to the principal amount upon maturity. Calculate the required monthly interest only payment. Calculate the required monthly sinking fund payment. A developer has approached city hall to arrange a bond issue of $1,000,000 to finance the construction of a local development project. The developer will be required to make monthly interest only payments at the bond rate of 6% per annum, compounded semi-annually. Since the total principal must be repaid upon maturity of the loan (5 years), sinking fund payments will be made monthly at a rate of 2.5% per annum, compounded semi-annually. These periodic payments will accumulate to the principal amount upon maturity. Calculate the required monthly interest only payment. Calculate the required monthly sinking fund payment.
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