A corporation sold 5,000 issues of 20-year bonds, having a total face value of P5,000,000, for P4,750,000. The bonds bear interest at 10%, payable semiannually.

(a) The company wishes to establish a sinking fund for retiring the bond issue and will make semiannual deposits that will earn 8% compounded semiannually. Compute the annual cost for interest and redemption of these bonds.