3. ABC Corporation issued today a bond in favor of Mr. Barboncito and the bond has a face value of P1,000,000.00. Barboncito expects to earn at a bond rate of 7% and such bond matures six (6) years from today. If interest, i, equals 12% compounded yearly, a. What is the present value of the bond? b. The President of the corporation is bent on paying the yearly obligations to Barboncito, in addition to the yearly fund that the corporation has to set aside in anticipation of the maturity of the bond. How much then is the total yearly amount that the corporation has to prepare to meet its obligations?
3. ABC Corporation issued today a bond in favor of Mr. Barboncito and the bond has a face value of P1,000,000.00. Barboncito expects to earn at a bond rate of 7% and such bond matures six (6) years from today. If interest, i, equals 12% compounded yearly, a. What is the present value of the bond? b. The President of the corporation is bent on paying the yearly obligations to Barboncito, in addition to the yearly fund that the corporation has to set aside in anticipation of the maturity of the bond. How much then is the total yearly amount that the corporation has to prepare to meet its obligations?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter18: Savings,investment And The Financial System
Section: Chapter Questions
Problem 1PA
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![3. ABC Corporation issued today a bond in favor of Mr. Barboncito and the bond has a face value of P1,000,000.00. Barboncito expects
to earn at a bond rate of 7% and such bond matures six (6) years from today. If interest, i, equals 12% compounded yearly,
a. What is the present value of the bond?
b. The President of the corporation is bent on paying the yearly obligations to Barboncito, in addition to the yearly fund that the
corporation has to set aside in anticipation of the maturity of the bond. How much then is the total yearly amount that the corporation
has to prepare to meet its obligations?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4191ec4a-a4c9-4584-9749-964e4aa0d03a%2Fc5d7807f-b645-4ec4-8c88-871b1a2dbfdf%2F5tyguw7_processed.png&w=3840&q=75)
Transcribed Image Text:3. ABC Corporation issued today a bond in favor of Mr. Barboncito and the bond has a face value of P1,000,000.00. Barboncito expects
to earn at a bond rate of 7% and such bond matures six (6) years from today. If interest, i, equals 12% compounded yearly,
a. What is the present value of the bond?
b. The President of the corporation is bent on paying the yearly obligations to Barboncito, in addition to the yearly fund that the
corporation has to set aside in anticipation of the maturity of the bond. How much then is the total yearly amount that the corporation
has to prepare to meet its obligations?
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