Williams Software borrowed $2,500,000 through a bond issued to purchase new servers. It established a sinking fund to retire this debt in three years and made deposits into it at the beginning of every six months. The fund earned 10% compounded semi-annually during the period. a. Calculate the size of the periodic payments deposited into the fund. A full solution for the payment size should be shown. Submit your solution. Round up to the next cent b. Construct a partial sinking fund schedule showing the details for the first two and last two payments and the totals of the schedule.

Williams Software borrowed $2,500,000 through a bond issued to purchase new servers. It established a sinking fund to retire this debt in three years and made deposits into it at the beginning of every six months. The fund earned 10% compounded semi-annually during the period. a. Calculate the size of the periodic payments deposited into the fund. A full solution for the payment size should be shown. Submit your solution. Round up to the next cent b. Construct a partial sinking fund schedule showing the details for the first two and last two payments and the totals of the schedule.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.21MCE

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