Q2

Sepia Inc. issued bonds for $450,000 that were redeemable in 6 years. They established a sinking fund that was earning 3.78\% 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 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 . 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