The Town of The Pas bought rescue equipment for $176 000.The financing agreement provides for annual interest payments and equal payments at the end of each year into a sinking fund for 13 years.After 13 years the proceeds of the sinking fund will be used to retire the principal.Interest on the debt is 6.5% compounded annually and interest earned by the sinking fund is 5.1% compounded annually.
a)What is the annual interest payment?
b)What is the size of the annual payment into the sinking fund?
c)What is the total annual cost of the debt?
d)What is the book value of the debt after 6 years?
e)Construct a partial sinking fund schedule showing details,including the book value of the debt,for the last three years and totals.

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The Answer of The Town of The Pas bought rescue equipment for $176 000.The financing agreement provides for annual interest payments and equal payments at the end of each year into a sinking fund for 13 years.After 13 years the proceeds of the sinking fund will be used to retire the principal.Interest on the debt is 6.5% compounded annually and interest earned by the sinking fund is 5.1% compounded annually.
a)What is the annual interest payment?
b)What is the size of the annual payment into the sinking fund?
c)What is the total annual cost of the debt?
d)What is the book value of the debt after 6 years?
e)Construct a partial sinking fund schedule showing details,including the book value of the debt,for the last three years and totals.

The Town of the Pas Bought Rescue Equipment for $176