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Solved: Cargojet Corp Sinking Fund Problem

Cargojet Corp. is preparing for the replacement of one of its jets in three years by making payments to a sinking fund at the beginning of every six months for the next three years. The fund earns 6% compounded semiannually, and the capital required in three years is $750,000.

a. What is the size of the semiannual payment made to the sinking fund? __________

Cargojet corp: What is the size of the semiannual payment made to the sinking fund?

 

Cargojet Corp must deposit $115, 948.13 at the end of every six months in order to have $750,000 at the end of 3 years

b. How much of the maturity value of the fund will be interest?

Cargojet corp: How much of the maturity value of the fund will be interest?

C. Construct a partial sinking fund schedule showing details of the first two and the last two payments and totals. Round the sinking fund payments, interest payments, and increases in the fund to the nearest dollar.

Cargojet Corp: Construct a partial sinking fund schedule showing details of the first two and the last two payments and totals. Round the sinking fund payments, interest payments, and increases in the fund to the nearest dollar.

 

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