CO129-264 - Governor Sir Robinson & Public Offices - 1894 [9-12]

652

balance.

5. The whole transaction works out as follows on the basis of a 3 per cent rate for the Capitalisation of Savings and the investment of Sinking Funds.

Debenture Debt £200,000

To be redeemed by appropriation of Sinking Fund accumulation 58,600

Amount to be raised by conversion or sale of Stock 400

Annual charges on this Stock Interest at 3 per cent £4,949 for 49 years) Sinking Fund at 1 per cent 1,414 (commencing 2 years hence.) 6,363

Annual charges on the Debenture Loan Interest at 4 per cent £8,000 for 13 years) Sinking Fund 7,072 £15,072

(a) The savings effected by the operation will be (b) £47,650 Saving of £3,051 (£8,000-£4,949) a year for 13 years, capitalised @ 3 per cent. (c) £19,872 Saving of Debenture Sinking Fund Contribution of £7,072 a year for 2 years, accumulating for 11 years @ 3 per cent. £72,466 Saving as between Stock and Debenture Sinking Fund Contribution, £5,658 a year (£7,072-£1,414) for 11 years, capitalised at 3 per cent. £139,988 Total Saving at end of 13 years

But the charges on the £141,400 of 3 per cent Stock (3.) created