document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1116948>Question 1116948</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Tri-Star Airlines intends to pay off a $20,000,000 bond issue that comes due in 4 years. How much must the company set aside now, at 6 % interest compounded quarterly, to accumulate the required amount of money?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #732037 by </B><A HREF=/tutors/aboutme.mpl?userid=addingup><B>addingup(3677)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=addingup><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=addingup><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=732037\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Calculate the Present Value of 20,000,000<BR>\n" );
document.write( "Time: 4 years compounded quarterly = 4*4 = 16<BR>\n" );
document.write( "Interest: 6% compounded quarterly = 0.015<BR>\n" );
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document.write( "PV = 20,000,000(1+0.015)^-16<BR>\n" );
document.write( "PV = 20,000,000(1.015)^-16<BR>\n" );
document.write( "PV = 20,000,000(0.788) = 15,760,000<BR>\n" );
document.write( "Refresher:<BR>\n" );
document.write( "negative exponent rule: negative exponents in the numerator get moved to the denominator and become positive exponents. <BR>\n" );
document.write( "So, 1.015^-16 is the same as 1/(1.015)^16<BR>\n" );
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