At the beginning of 2007 Shanklin Company issued 10-year bonds with a face value of $1,000,000 due

Question:

At the beginning of 2007 Shanklin Company issued 10-year bonds with a face value of $1,000,000 due on December 31, 2016. The company wants to accumulate a fund to retire these bonds at maturity by making annual deposits beginning on December 31, 2007.

Required

How much must the company deposit each year, assuming that the fund will earn 12% interest a year compounded annually?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...