On January 1, 2020, a company issued P10,000,000 bonds that will mature in 5 years. The management decided to set up a separate fund for the retirement of these bonds. The fund is to be placed in a separate account to be maintained in the company's depository bank. In a board resolution, it was decided that deposits of equal amounts will be made every June 30 and December 31, starting June 30, 2020 up to December 31, 2024. The company expects to earn an average interest of 10%, net of tax, on this investment. How much is the required semi-annual deposit that will accumulate P10,000,000 at the end of five years? A. P1,637,975 B. P1,295,052 C. P1,000,000 D. P 795,045
On January 1, 2020, a company issued P10,000,000 bonds that will mature in 5 years. The management decided to set up a separate fund for the retirement of these bonds. The fund is to be placed in a separate account to be maintained in the company's depository bank. In a board resolution, it was decided that deposits of equal amounts will be made every June 30 and December 31, starting June 30, 2020 up to December 31, 2024. The company expects to earn an average interest of 10%, net of tax, on this investment. How much is the required semi-annual deposit that will accumulate P10,000,000 at the end of five years? A. P1,637,975 B. P1,295,052 C. P1,000,000 D. P 795,045
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, a company issued P10,000,000 bonds that will mature in 5 years. The management decided to set up a separate fund for the retirement of these bonds. The fund is to be placed in a separate account to be maintained in the company's depository bank.
In a board resolution, it was decided that deposits of equal amounts will be made every June 30 and December 31, starting June 30, 2020 up to December 31, 2024. The company expects to earn an average interest of 10%, net of tax, on this investment.
How much is the required semi-annual deposit that will accumulate P10,000,000 at the end of five years?
In a board resolution, it was decided that deposits of equal amounts will be made every June 30 and December 31, starting June 30, 2020 up to December 31, 2024. The company expects to earn an average interest of 10%, net of tax, on this investment.
How much is the required semi-annual deposit that will accumulate P10,000,000 at the end of five years?
A. P1,637,975
B. P1,295,052
C. P1,000,000
D. P 795,045
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