A corporation sold an issue of 20 year bonds, having a total face value of P10 Million pesos for P9.5 Million pesos. The bonds bear interest at 16%, payable semiannually. The company wishes to...

A corporation sold an issue of 20 year bonds, having a total face value of P10 Million pesos for
P9.5 Million pesos. The bonds bear interest at 16%, payable semiannually. The company wishes
to establish a sinking fund for retiring the bond issue and will make semiannual deposits that
will earn12%, compounded semi annually. Compute the annual cost for interest and redemption
of these bonds.