Question

Sepia Inc. issued bonds for $425,000 that were redeemable in 6 years. They established a sinking fund that was earning 3.83% 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 fund deposit.

b. Calculate the sinking fund balance at the end of the payment period 6

c. Calculate the interest earned in payment period 7

d. Calculate the amount by which the sinking fund increased in payment period 7.

Please do not copy from Chegg. Otherwise i have to report the answer.