Find the book value of the debt after seven years

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Reference no: EM132793161

Question - A city has financed a local project with a $500,000 bond issue with a coupon rate of 3% compounded semi-annually. The bonds are redeemable in 12 years. At the same time, a sinking fund earning interest at 4.2% compounded semi-annually is established to accumulate the full $500,000 when the bonds mature in 12 years.

Required -

Find the periodic expense of the debt.

Find the book value of the debt after 7 years.

Construct the sinking fund schedule for the 9th year.

Reference no: EM132793161

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