Question
A company issued bonds worth $750,000, with a coupon rate of 7% compounded semi-annually, and set up a sinking fund to retire the debt in
A company issued bonds worth $750,000, with a coupon rate of 7% compounded semi-annually, and set up a sinking fund to retire the debt in 15 years. It made deposits at the end of every 6 months into the fund, and the fund was earning 8.2% compounded semi-annually. Find the periodic expense of the debt. Find the book value of the debt after 8 years. Construct the sinking fund schedule for the 10th year.
1. Find the periodic expense of the debt.
PMT Setting | |
N | |
I/Y | |
P/Y | |
C/Y | |
PV | |
PMT | |
FV |
2. Find the book value of the debt after 8 years.
PMT Setting | |
N | |
I/Y | |
P/Y | |
C/Y | |
PV | |
PMT | |
FV |
3. Construct the sinking fund schedule for the 10th year.
Payment Number | Periodic Payment | Interest for Payment Interval | Increase in Fund | Fund Balance | Book Value |
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