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What is the future required payment that Consolidated Chemical will make 15 years later on each bond? To help ease a continuing need for financing,

What is the future required payment that Consolidated Chemical will make 15 years later on each bond?

To help ease a continuing need for financing, the Consolidated Chemical Company is considering borrowing from insurance companies through a so-called private placement of bonds in addition to issuing bonds in public debt markets. The company must choose between transactions suggested by two different insurance companies. In both transactions, Consolidated Chemical would receive $10,000,000 up front in exchange for issuing a bond promising a single (larger) maturity payment from Consolidated Chemical in 15 years at a promised interest rate. The two options open to Consolidated Chemical are as follows: A 15-year bond to Pru-Johntower Life Insurance Company, promising an annual rate of interest of 10%; A 15-year bond to Tom Paine Mutual Life Insurance Company, promising a rate of interest of 9.72% per year, compounded monthly.

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