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Danny Lawrence Properties, Inc., has a bond issue that will mature in 25 years for $1

Chapter 14, Problem 21

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QUESTION:

Danny Lawrence Properties, Inc., has a bond issue that will mature in 25 years for $1 million. How much must the company set aside each year in a sinking fund at 8% annual interest to meet this future obligation?

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QUESTION:

Danny Lawrence Properties, Inc., has a bond issue that will mature in 25 years for $1 million. How much must the company set aside each year in a sinking fund at 8% annual interest to meet this future obligation?

ANSWER:

 

Step 1 of 3 

Future amount upon bond maturity: $1,000,000.

Number of years for maturity: 25 years

Annual interest: 8%

 

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