Answer number 1 with cash flow diagram 1. A person wishes to accumulate P2,500 over a period of 15 yrs so that a cash payment can bemade for a new roof on a summer cottage. To have this amount when it is needed, annualpayments will be made into a savings account that earns 8% interest per year. How much musteach annual payment be? Draw a cash flow diagram.2. Mrs. X has just purchased a new car for 1M. She makes a down payment of 30% of thenegotiated price and then makes payments of P15,000 per month thereafter for 60 months.Furthermore, she believes the car can be sold for P750,000 at the end of 3 years. Draw a cashflow diagram of this situation from Mrs. X's point of view.3. An individual makes 6 annual deposits of P2,000 in a savings account that pays interest rate of4% compounded annually. Two years after making the last deposit, the interest rate changesto 7% compounded annually. Ten years after the last deposit, the accumulated money iswithdrawn from the account. How much is withdrawn?4. What value of N comes closest to making the upper cash flow diagram (a) equivalent to theone below (b)? Let i = 15% per annum.YearsN=?(a)

* SOLUTION :- * 1) Given, FV=2500 I =8% n=15, then We use the following formula to calculate…

1. A person wishes to accumulate P2,500 over a period of 15 yrs so that a cash payment can be made for a new roof on a summer cottage. To have this amount when it is needed, annual payments will be made into a savings account that earns 8% interest per year. How much must each annual payment be? Draw a cash flow diagram.

1. A person wishes to accumulate P2,500 over a period of 15 yrs so that a cash payment can be made for a new roof on a summer cottage. To have this amount when it is needed, annual payments will be made into a savings account that earns 8% interest per year. How much must each annual payment be? Draw a cash flow diagram.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer number 1 with cash flow diagram

1. A person wishes to accumulate P2,500 over a period of 15 yrs so that a cash payment can be
made for a new roof on a summer cottage. To have this amount when it is needed, annual
payments will be made into a savings account that earns 8% interest per year. How much must
each annual payment be? Draw a cash flow diagram.
2. Mrs. X has just purchased a new car for 1M. She makes a down payment of 30% of the
negotiated price and then makes payments of P15,000 per month thereafter for 60 months.
Furthermore, she believes the car can be sold for P750,000 at the end of 3 years. Draw a cash
flow diagram of this situation from Mrs. X's point of view.
3. An individual makes 6 annual deposits of P2,000 in a savings account that pays interest rate of
4% compounded annually. Two years after making the last deposit, the interest rate changes
to 7% compounded annually. Ten years after the last deposit, the accumulated money is
withdrawn from the account. How much is withdrawn?
4. What value of N comes closest to making the upper cash flow diagram (a) equivalent to the
one below (b)? Let i = 15% per annum.
Years
N=?
(a)

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