document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1164972>Question 1164972</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A major shipping company is planning to purchase new cargo ships. It wants to borrow $1100 million by issuing bonds. The bonds are for a 15-year period with at a rate of 9 percent per year compounded quarterly. Interest is to be paid each quarter to bondholders. How much will the company have to pay in quarterly interest? How much interest will it pay over the 12-year period?\r<BR>\n" );
document.write( "\n" );
document.write( " </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #853500 by </B><A HREF=/tutors/aboutme.mpl?userid=CPhill><B>CPhill(2189)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=CPhill><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=CPhill><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=853500\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> ```python<BR>\n" );
document.write( "principal = 1100 * 10**6<BR>\n" );
document.write( "annual_rate = 0.09<BR>\n" );
document.write( "compounding_frequency = 4<BR>\n" );
document.write( "years_period = 12\r<BR>\n" );
document.write( "\n" );
document.write( "quarterly_rate = annual_rate / compounding_frequency<BR>\n" );
document.write( "quarterly_interest = principal * quarterly_rate\r<BR>\n" );
document.write( "\n" );
document.write( "total_quarters_12_years = years_period * compounding_frequency<BR>\n" );
document.write( "total_interest_12_years = quarterly_interest * total_quarters_12_years\r<BR>\n" );
document.write( "\n" );
document.write( "print(f\"{quarterly_interest=}\")<BR>\n" );
document.write( "print(f\"{total_interest_12_years=}\")\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "```\r<BR>\n" );
document.write( "\n" );
document.write( "```text<BR>\n" );
document.write( "quarterly_interest=24750000.0<BR>\n" );
document.write( "total_interest_12_years=1188000000.0\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "```\r<BR>\n" );
document.write( "\n" );
document.write( "To calculate the interest payments for the shipping company's bonds, we use the simple interest formula applied to each compounding period (quarter), as the interest is paid out to bondholders.\r<BR>\n" );
document.write( "\n" );
document.write( "### 1. Quarterly Interest Payment\r<BR>\n" );
document.write( "\n" );
document.write( "The quarterly interest rate is the annual rate divided by the number of quarters in a year.\r<BR>\n" );
document.write( "\n" );
document.write( "* **Principal ():** <BR>\n" );
document.write( "* **Annual Rate ():** <BR>\n" );
document.write( "* **Quarters per year ():** \r<BR>\n" );
document.write( "\n" );
document.write( "**The company will have to pay $24.75 million in quarterly interest.**\r<BR>\n" );
document.write( "\n" );
document.write( "---\r<BR>\n" );
document.write( "\n" );
document.write( "### 2. Interest Paid Over a 12-Year Period\r<BR>\n" );
document.write( "\n" );
document.write( "To find the total interest over 12 years, we multiply the quarterly payment by the total number of quarters in that timeframe.\r<BR>\n" );
document.write( "\n" );
document.write( "* **Number of Quarters:** \r<BR>\n" );
document.write( "\n" );
document.write( "**The company will pay $1,188 million (or $1.188 billion) in interest over the 12-year period.** </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );