To redeem a $100,000 promissory note due in 12 years. Flinstone Inc. has set up a sinking fund earning 7.25% compounded semi-annually. Equal deposits are made at the beginning of every six months.

What is the size of the semi-annual deposits?

How much of the maturity value of the fund is deposits?

How much is interest?

So far this is what I worked out for 1st question.

FV=100,000 P/Y=2 C/Y=2 n=12(2) I/Y=7.25 i=7.25/2 =3.625 =.03625

100,000=PMT (1.03625^24-1/.03625)

100,000=PMT(37.25349873)

PMT=2684.311633 Correct answer is 2590.41 could this be a rounding issue?

(2590.42)(24) = 62169.84

100,000-62,169.84 = 37,830.16

So then maturity value is 62,169.84 and interest is 37,830.16 so the semi-annual deposits would be 2590.41. I can get 2590.42 using financial calculator but I need to show my work in long form. Could someone please check where I went wrong in first part of Question? Thanks

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