From the Following Extract of an Amortisation Schedule Pertaining to a Compound

question 53

Multiple Choice

From the following extract of an amortisation schedule pertaining to a compound financial instrument,what is the net liability (assuming the debenture has not yet been repaid) ,at the end of Period 10? $$\begin{array} { | c | r | r | r | r | r | r | } \hline \text { Period } & \begin{array} { c } \text { Opening } \\\text { liability }\end{array} & \begin{array} { c } \text { Effective } \\\text { interest }\end{array} & \text { Coupon rate } & \begin{array} { c } \text { Discount } \\\text { amortisation }\end{array} & \begin{array} { c } \text { Balance of } \\\text { discount }\end{array} & \text { Net liability } \\\hline 0 & & & & & 736055 & 9263945 \\\hline 1 & 9263945 & 555837 & 500000 & 55837 & 680218 & 9319782 \\\hline 2 & 9319782 & 559187 & 500000 & 59187 & 621031 & 9378969 \\\hline 3 & 9378969 & 562738 & 500000 & 62738 & 558293 & 9441707 \\\hline\end{array}$$

• A) Nil
• B) 9 500 000
• C) 9 905 582
• D) 10 000 000

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Definitions:

Coal

A combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams, used primarily as a fuel.

Starting Material

The raw substances or components that are used as the basis for a chemical reaction or manufacturing process.

Limestone

A sedimentary rock composed mainly of skeletal fragments of marine organisms such as coral, forams, and mollusks.

Gas Centrifuges

Devices used in the uranium enrichment process that rapidly spin gas to separate isotopes, particularly to increase the percentage of uranium-235 for use in nuclear reactors or weapons.