A community wishes to purchase an existing utility valued at P 500,000 by selling 5% bonds that will mature in 30 years. The money to retire the bond will be raised by paying equal annual amounts into a sinking fund that will earn 4%. What will be the total annual cost of the bonds until they mature? A. P 44,667.98 B. P 37,345.78 C. P 34,515.05 D. P 33,915.05

A community wishes to purchase an existing utility valued at P 500,000 by selling 5% bonds that will mature in 30 years. The money to retire the bond will be raised by paying equal annual amounts into a sinking fund that will earn 4%. What will be the total annual cost of the bonds until they mature? A. P 44,667.98 B. P 37,345.78 C. P 34,515.05 D. P 33,915.05

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Teal and Associates needs to borrow $55,000. The best loan they can find is one at 13% that must be repaid in monthly installments over the next 5- years. How much are the monthly payments? (a) State the type. sinking fund future value ordinary annuity amortization present value (b) Answer the question. (Round your answer to the nearest cent.) $ %24
(c) A sum of 10,000 RO is required in 5 yoars from now. An annual sinking fund is to be sot up that will return an interest rate of 6% over this period. What will be the annual sinking fund instalments?
Use the sinking fund formula shown to the right to determine the semiannual payments with 8% interest are compounded semiannually for 4 years to accumulate $24,000.
Suppose that a life insurance company has guaranteed a payment of $14 million to a pension fund 4.5 years fromfund and can invest the entire premium for 4.5 years at an annual interest rate of 6.25%, how much will the life in$13.7 million$17.8 million$18.4 million$14.1 million
An investor is setting up a fund which requires 18 years of contributions. The investor pays £200 per month for 15 years. After 15 years, the payments increase by £10 for the subsequent 3 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 2%. What is the value of the fund after 18 years? £ 数字 Enter an answer correct to 2 decimal places.
Use the sinking fund formula shown to the right to determine the monthly payment needed to accumulate $400,000 with 7% interest are compounded monthly for 29 years. The monthly invested payment is $
(a) Cheyenne Inc. has $470,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $70,044 at the end of each year for 10 years, and the other is to receive a single lump-sum payment of $1,459,750 at the end of the 10 years. Which alternative should Cheyenne select? Assume the interest rate is constant over the entire investment. eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
Use the sinking fund formula shown to the right to determine the monthly payment needed to accumulate $560,000 with 9% interest are compounded monthly for 31 years. p=Arn1+rnnt−1 The monthly invested payment is $
Find the size of each of 8 payments made at the end of each year into a 9% rate sinking fund which produces 55000 at the end of 8 years. payment size
1. You just won the PA lottery! The lottery offers you a choice: you may choose a lump sum today, or $89 million in 26 equal annual installments at the end of each year. Assume the funds can be invested (yield) at an annual rate of 7.65%. What is the lump sum that would equal the present value of the annual installments? : $89,000,000 $38,163,612 $41,083,128 $13,092,576

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