A company takes out a loan of ₱500,000, which must be repaid in full at the end of 10 years. The company decides to establish a sinking fund to accumulate the required amount by making annual deposits. The sinking fund earns an interest rate of 5% compounded annually.
a. Determine the amount of the annual deposit required for the sinking fund so that it will reach ₱500,000 in 10 years.
b. Construct a sinking fund schedule for the first 5 years.
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