THE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: A developer has approached city hall to arrange a bond issue of $1,500,000 to finance the construction of a local development project. The developer will be required to make monthly interest only payments at the bond rate of 4% per annum, compounded semi-annually. Since the total principal must be repaid upon maturity of the loan (5 years), sinking fund payments will be made monthly at a rate of 2.75% per annum, compounded semi-annually. These periodic payments will accumulate to the principal amount upon maturity. 14. Calculate the required monthly interest only payment. (1) $4,123.92 (2) $4,958.84 (3) $4,645.99 (4) $4,297.72 15. Calculate the required monthly sinking fund payment. (1) $23,358.38 (2) $24,992.89 (3) $25,669.10 (4) $22,197.21 16. Which of the following statements regarding sinking funds is FALSE? (1) The simplest application of a sinking fund is where there is a constant payment made at irregular intervals. (2) A sinking fund is a method to replay a long-term debt obligation in an interest only loan. (3) The sinking fund lending structure is commonly applied in corporate or government bonds. (4) Sinking funds are commonly used in reserve fund planning for condominiums and stratas