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Corporation having recently issued a $25 million. 10-years bond issue is required to make annual year end sinking fund deposits of $ 1,800,000. The deposits
Corporation having recently issued a $25 million. 10-years bond issue is required to make annual year end sinking fund deposits of $ 1,800,000. The deposits are made on the last day of each year and yield a return of 5%.
1. Compute the fund balance at the end of the 10 years.
2. Compute the additional annual deposit amount that should have been made at the end of each of the 10 years to accumulate the $25 million.
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