Question

A bank in Calgary issued bonds for $450,000 that were redeemable in 9 years. It established...

A bank in Calgary issued bonds for $450,000 that were redeemable in 9 years. It established a sinking fund that was earning 3.5% compounded semi-annually to retire this debt on maturity and made equal deposits at the beginning of every six months.

a. What is the size of the periodic payments?

Math   Advanced-Math   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Here i am convert given data in compound interest and use installment formula.answer is below thank you.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
To provide for expansion, a company has established a sinking fund earning 8 % monthly. The...
To provide for expansion, a company has established a sinking fund earning 8 % monthly. The fund is anticipated to reach a balance of $72,000 in 13 years. Payments are made at the beginning of every month.month. (a) What is the size of the periodic payment? (b) What is the accumulated balance at the end of payment period 107?
Kirk, Klein & Co. requires $104,000 fifteen years from now to retire a debt. A sinking...
Kirk, Klein & Co. requires $104,000 fifteen years from now to retire a debt. A sinking fund is established into which equal payments are made at the end of every 3 months. Interest is 10 % compounded quarterly. (a) What is the size of the quarterly payment? (b) What is the balance in the sinking fund after two years? (c) How much interest will be earned by the fund in the 20th payment interval? (d) By how much will the...
1. Allright Corporation started making sinking fund deposits of $20,000 today. Its bank pays 5% compounded...
1. Allright Corporation started making sinking fund deposits of $20,000 today. Its bank pays 5% compounded semi-annually and the deposits will be made at the beginning of every six months for 20 years. What will the fund be worth at the end of that time? a. $1,381,752 b. $1,567,980 c. $1,425,658 d. $1,623,876 2. Given a 30-year mortgage loan of $100,000, monthly pay in arrrears, fully amortizing with an annual interest rate of 5%, what is the balance of the...
Boliver Basic Industries (BBI) issued $1,000 12-year bonds 3 years ago. The bonds make quarterly coupon...
Boliver Basic Industries (BBI) issued $1,000 12-year bonds 3 years ago. The bonds make quarterly coupon payments and have a coupon rate of 8%. Bonds of similar risk and maturity offer a yield-to-maturity of 7% APR (compounded semi-annually). What is the value of a BBI bond?
The following bonds were issued by the Archer Company in 2013: Maturity in 10 years Interest...
The following bonds were issued by the Archer Company in 2013: Maturity in 10 years Interest paid every six months at a coupon rate of 4.3% Face value/maturity value of $2 million. If the bonds are issued to yield 4%, what amount of cash will be received by Margolis not counting accrued interest or any selling costs. In 2016, after 6 payments, the Archer Company wants to buy back the bonds in the market. If the current market rate on...
The following bonds were issued by the Archer Company in 2013: Maturity in 10 years Interest...
The following bonds were issued by the Archer Company in 2013: Maturity in 10 years Interest paid every six months at a coupon rate of 4.3% Face value/maturity value of $2 million. If the bonds are issued to yield 4%, what amount of cash will be received by Margolis not counting accrued interest or any selling costs. In 2016, after 6 payments, the Archer Company wants to buy back the bonds in the market. If the current market rate on...
1. A generator costing P750,000 depreciates in value each year by 20% of its value. Find...
1. A generator costing P750,000 depreciates in value each year by 20% of its value. Find its book value when the generator is 5 years old using DBM. 2. APIEMS Corporation is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its outstanding bonds at maturity. The bonds are redeemable in 10 years and their maturity value is P10M. How much should be deposited each year if the fund pays interest at the rate of...
9. Company BW has issued 8,000 corporate bonds with a maturity value of $1,000 and a...
9. Company BW has issued 8,000 corporate bonds with a maturity value of $1,000 and a coupon rate of 7%. Coupon payments are made every 6 months and those bonds will mature in a year from today. Current market price of those bonds is $976.86. Marginal corporate income tax rate is 34%, find the annual after-tax cost of debt.
Itzak Perlman Corporation needs $15,000,000 in ten years to be able to retire bonds that will...
Itzak Perlman Corporation needs $15,000,000 in ten years to be able to retire bonds that will be maturing at that time. What amount must Perlman deposit into a bond sinking fund at the end of each year if the fund is expected to earn interest at a rate of 8% per year? 2. Igor Stravinsky is retiring today. His employer has given the option of taking a lump sum payout of his pension or receiving quarterly annuity payments for the...
Mud Outfitters, Incorporated issued 9%, 30 year Bonds 5 Years ago. The bonds have a par...
Mud Outfitters, Incorporated issued 9%, 30 year Bonds 5 Years ago. The bonds have a par value of $1,000 and pay interest semi-annually. The bonds have a 10 year deferred call and offer a call premium equal to 6 months interest. The Bonds are currently price at $1,125. What is the yield to maturity of the Mud Outfitters Bonds? What is the yield to call on the Mud Outfitters Bonds? If you were to buy these bonds, which yield would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT