Question: On August 1, 1993, Mrs. Chan borrows $20 000 for 10 years. Interest at 11% per annum convertible semi-annually must be paid as it falls due. The principal is replaced by means of level deposits on February 1 and August 1 in years 1994 to 2003 (inclusive) into a sinking fund earning j1 = 7% in 1994 through December 31, 1998, and j1 = 6% January 1, 1999, through 2003.
a) Find the semi-annual expense of the loan.
b) How much is in the sinking fund just after the August 1, 2002, deposit?
c) Show the sinking-fund schedule entries at February 1, 2003, and August 1, 2003.