Of the reserve fund of $2,600,000, the first payment of $300,000 is due now and must be subtracted from the reserve fund, which would leave you with $2,300,000. This amount will be invested for 5 years at the rate of 5.2% comp. quarterly. It is assumed that this investment in not "locked in" and that the company can withdraw the needed payments as they come due.
If this assumption is right, then the $2,300,000 will be worth $2,421,952.48 in one year from now. From this you have to subtract the $700,000 due. That leaves you $1,721,952.48. This amount will continue to earn to earn interest for another year, at which time it will be worth $1,813,255.25. From this amount you will have to subtract $800,000 due in 2 years, which will leave you with $1,013,255.25. This amount will continue to earn interest for another 2 years, which comes to $1,123,555.23. Now, from this amount you have to subtract $1,000,000 due in the 4th year, which will leave you with $123,555.25. This amount will continue to earn interest for another year, which comes to $130,106.47 at the end of the 5th year.
From these calculations, you can easily answer their questions.