1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%, what is the total peso amount upon the deposit of the sixth payment? 2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annual interest rate of 7%, how much can be withdrawn after 6 years?
1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%, what is the total peso amount upon the deposit of the sixth payment? 2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annual interest rate of 7%, how much can be withdrawn after 6 years?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ANNUITY
(Draw the cash flow diagram for each problem)
1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%,
what is the total peso amount upon the deposit of the sixth payment?
2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annual
interest rate of 7%, how much can be withdrawn after 6 years?
3. A fund is to provide an annual scholarship at P4,000.00 for the first 5 years; P6,000.00 for
the next 5 years and P9,000.00 thereafter. The fund will be established 1 year before the
first scholarship is awarded. If the fund earns 12% interest, what sum must be deposited?
4. A man paid 10% as down payment of P200,000.00 for a house and lot and agreed to pay
the balance on monthly instalments for 5 years at an interest rate of 15% compounded
monthly. What was the monthly instalment in pesos?
5. An investor deposits P10,000.00 at the end of each year in an account which gives a
nominal annual interest of 5% compounded continuously. How much sum will he
accumulate in 10 years?
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