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A company issued bonds worth $750,000, with a coupon rate of 7%, and set up a sinking fund to retire the debt in 15 years.
A company issued bonds worth $750,000, with a coupon rate of 7%, 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.
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