1, A corporation sold an issue of 20 year bonds, having a total face value of P10M for P9.5M. The bonds bear interest at 16% payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12% compounded semiannually. Compute for the annual cost for interest and redemption of these bonds.

1, A corporation sold an issue of 20 year bonds, having a total face value of P10M for P9.5M. The bonds bear interest at 16% payable semiannually. The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 12% compounded semiannually. Compute for the annual cost for interest and redemption of these bonds.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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