1. Car loan Planning to give his son a car as a gift when he graduates from college 2 years from now, Adam decides to set aside a fund to enable him to pay the expected monthly amortization of P 21,500.00 every month for 3 years. If a bank offers to pay an interest of 7.5% compounding monthly, how much should be set aside in order to achieve his plan?
1. Car loan Planning to give his son a car as a gift when he graduates from college 2 years from now, Adam decides to set aside a fund to enable him to pay the expected monthly amortization of P 21,500.00 every month for 3 years. If a bank offers to pay an interest of 7.5% compounding monthly, how much should be set aside in order to achieve his plan?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter14: Planning For Retirement
Section: Chapter Questions
Problem 8FPE
Related questions
Question
Solve for the deffered annuity
![Solve the following problems.
1.
Car loan
Planning to give his son a car as a gift when he graduates from college 2 years
from now, Adam decides to set aside a fund to enable him to pay the expected
monthly amortization of P 21,500.00 every month for 3 years. If a bank offers to
pay an interest of 7.5% compounding monthly, how much should be set aside in
order to achieve his plan?
2.
Real Estate
A house and lot package is available at P 27,000.00 monthly payable in 20
years. The first payment is due in 2 years exactly the time when the house unit
will be turned in to the buyers. How much is the cash value if the interest rate is
7.5% convertible monthly?
Sketch a time diagram or timeline for each problem.
Rubrics for rating the output:
Score Descriptors
The situation is correctly modeled with a deferred annuity, appropriate
mathematical concepts are fully used in the solution and the correct
20
final answer is obtained.
16](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1782103b-de96-47ba-9ada-310c8dfa370b%2F278ec219-8aee-4da3-9978-8030d162238f%2Fkuseivo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Solve the following problems.
1.
Car loan
Planning to give his son a car as a gift when he graduates from college 2 years
from now, Adam decides to set aside a fund to enable him to pay the expected
monthly amortization of P 21,500.00 every month for 3 years. If a bank offers to
pay an interest of 7.5% compounding monthly, how much should be set aside in
order to achieve his plan?
2.
Real Estate
A house and lot package is available at P 27,000.00 monthly payable in 20
years. The first payment is due in 2 years exactly the time when the house unit
will be turned in to the buyers. How much is the cash value if the interest rate is
7.5% convertible monthly?
Sketch a time diagram or timeline for each problem.
Rubrics for rating the output:
Score Descriptors
The situation is correctly modeled with a deferred annuity, appropriate
mathematical concepts are fully used in the solution and the correct
20
final answer is obtained.
16
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