"AMORTIZATION, EXTINCTION OF BONDED DEBTS, DISCHARGE DEBT. An INTEREST BEARING BOND DEBT is AMORTIZED by a sequence of usually unequal payments which pay interest and redeem a certain number of bonds at face value. A SCHEDULE for EXTINCTION is a table which shows distribution of each payment. ANNRATE% is the nominal annual interest rate. FACEVALU is bond's face value. NUMYEARS is the term in years. OUTSTP#A is the outstanding princ. at beginning of period. PAYMNINT is payment interval in months. VALUDEBT is the debt's value.OUTSTP#B is princ.'s value at end of period. PERPAY#A is payment due. INTDUE isinterest due at end of period. NREDEEM is number of bonds redeemed in period. PERIOD OUTSTND PRINC INT DUE # BONDS PERIODIC at beginning at end retired PAYMENT 1 $30,000 $2400 92 $11,600 2 20,800 1664 100 11,664 3 10,800 864 108 11,664 *** Answers to problems *** (c) PCSCC, Inc., 1993 (a) Set ANNRATE%=8, FACEVALU=100, NUMYEARS=3, OUTSTP#A=30,000, PAYMNINT=12, VALUDEBT=30000. Move cursor to OUTSTP#A and type =outstp#b (ent) twice. The Table is shown above. If OUTSTP#B<0 then decrease redeemed bonds by 1 and decrease PERPAY#A by 1 face value. Type any key to exit. ||(a) Construct an extinction schedule for the 3 annual payments required to discharge $30,000 in the form of $100 bonds bearing 8% interest. Type , to see answers. Type (F2) to return to helpfile."
