document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1193716>Question 1193716</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Topics In Contemporary Math\r<BR>\n" );
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document.write( "   21: Simple Interest\r<BR>\n" );
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document.write( "5) To fund the construction of a new Watchtower, Wayne enterprises sold $100 million of 12% bonds that mature in 5 years and pay coupons monthly. What is the total cost of the new Watchtower space station? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #848606 by </B><A HREF=/tutors/aboutme.mpl?userid=proyaop><B>proyaop(69)</B></A><img src=\"/images/stars/stars-08.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=proyaop><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/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=848606\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> * **Determine the monthly coupon payment:**<BR>\n" );
document.write( "    * Annual coupon payment = Coupon rate * Face value <BR>\n" );
document.write( "                                = 0.12 * $100,000,000 <BR>\n" );
document.write( "                                = $12,000,000<BR>\n" );
document.write( "    * Monthly coupon payment = $12,000,000 / 12 months <BR>\n" );
document.write( "                                = $1,000,000\r<BR>\n" );
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document.write( "* **The total cost of the Watchtower space station is NOT directly related to the amount of bonds issued.**\r<BR>\n" );
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document.write( "* **Key Points:**\r<BR>\n" );
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document.write( "    * The $100 million bond issue is a method of financing the construction, not the total cost itself.<BR>\n" );
document.write( "    * The actual cost of the Watchtower could be significantly higher or lower than $100 million depending on various factors like:<BR>\n" );
document.write( "        * Design and complexity of the space station<BR>\n" );
document.write( "        * Materials used in construction<BR>\n" );
document.write( "        * Labor costs<BR>\n" );
document.write( "        * Research and development costs<BR>\n" );
document.write( "        * Unexpected challenges or delays during construction<BR>\n" );
document.write( "        * Profit margins for the construction companies involved\r<BR>\n" );
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document.write( "**In summary:**\r<BR>\n" );
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document.write( "* The question provides information about how Wayne Enterprises is financing a portion of the Watchtower's construction (by issuing bonds), but it does not provide enough information to determine the total cost of the project.<BR>\n" );
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