t P 5,000,000. To raise the amount, the city decided to sell bonds to finance the said project. The bond rate is fixed at 5% payable yearly. The interest rate of the money is at 10% compounded yearly. The bond is redeemable 20 years from now at its face value. How much should the selling price of the bond as to attract buyers.
t P 5,000,000. To raise the amount, the city decided to sell bonds to finance the said project. The bond rate is fixed at 5% payable yearly. The interest rate of the money is at 10% compounded yearly. The bond is redeemable 20 years from now at its face value. How much should the selling price of the bond as to attract buyers.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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6. The City of Cebu plan to improve the water system distribution of the city. The estimated cost of the improvement is about P 5,000,000. To raise the amount, the city decided to
sell bonds to finance the said project. The bond rate is fixed at 5% payable yearly. The
interest rate of the money is at 10% compounded yearly. The bond is redeemable 20 years from now at its face value. How much should the selling price of the bond as to attract buyers.
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