11. BONUS: A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year loan, compounded quarterly, at 5% interest. The company, however, choses to put the loan (plus interest) in a SINKING FUND to help discharge the bank loan. The sinking fund offers an interest of 4%, compounded quarterly. Using the future lump sum debt as the lump sum that the business must pay to the bank in 5 years, FIND the quarterly deposits (R) that the business must pay into the sinking fund to pay off its bank debt in One Lump Sum after 5 years. Hint: This is a Problem directly from the Chapter 6 Worksheet

11. BONUS: A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year loan, compounded quarterly, at 5% interest. The company, however, choses to put the loan (plus interest) in a SINKING FUND to help discharge the bank loan. The sinking fund offers an interest of 4%, compounded quarterly. Using the future lump sum debt as the lump sum that the business must pay to the bank in 5 years, FIND the quarterly deposits (R) that the business must pay into the sinking fund to pay off its bank debt in One Lump Sum after 5 years. Hint: This is a Problem directly from the Chapter 6 Worksheet

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 19P

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