To raise $6,000,000 to expand into new markets, a very successful laptop manufacturing company issued bonds with a coupon rate of 3.50% compounded semi-annually, paying interest every 6 months, and redeemable in 18 years. They established a sinking fund to retire this debt on maturity and made equal deposits into the fund at the end of every 6 months. 

a. If the fund was earning 2.75% compounded semi-annually, calculate the periodic cost of the debt. Round the sinking fund payment up to the next cent 

b. Calculate the book value of the debt at the end of 7 years.