Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after 20 years Interest earned by the fund is 8% compounded semi-annually (a) What is the semi-annual interest payment on the debt? (b) What is the size of the semi-annual deposits into the sinking fund? (c) What is the total annual cost of the debt? (d) What is the interest earned by the fund in the 32nd payment interval? (e) What is the book value of the debt after 16 years? (1) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals (a) The interest payment is $ (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after 20 years Interest earned by the fund is 8% compounded semi-annually (a) What is the semi-annual interest payment on the debt? (b) What is the size of the semi-annual deposits into the sinking fund? (c) What is the total annual cost of the debt? (d) What is the interest earned by the fund in the 32nd payment interval? (e) What is the book value of the debt after 16 years? (1) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals (a) The interest payment is $ (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 20P
Related questions
Concept explainers
Question
![Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment
of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after
20 years Interest earned by the fund is 8% compounded semi-annually
(a) What is the semi-annual interest payment on the debt?
(b) What is the size of the semi-annual deposits into the sinking fund?
(c) What is the total annual cost of the debt?
(d) What is the interest earned by the fund in the 32nd payment interval?
(e) What is the book value of the debt after 16 years?
(f) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals.
(a) The interest payment is $
(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa9fbbdfc-14d0-465a-bf13-c4bdcf10426b%2Faf1402ed-9810-48db-83c0-5377e4153e2c%2F16civj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment
of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after
20 years Interest earned by the fund is 8% compounded semi-annually
(a) What is the semi-annual interest payment on the debt?
(b) What is the size of the semi-annual deposits into the sinking fund?
(c) What is the total annual cost of the debt?
(d) What is the interest earned by the fund in the 32nd payment interval?
(e) What is the book value of the debt after 16 years?
(f) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals.
(a) The interest payment is $
(Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed)
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College