3. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be purchased by installment to be paid within 5 years. Money is worth 8% compounded annually. Determine the amount of each annual payment if all payments are made at the beginning of each year of the 5 years.
3. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be purchased by installment to be paid within 5 years. Money is worth 8% compounded annually. Determine the amount of each annual payment if all payments are made at the beginning of each year of the 5 years.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be purchased by
installment to be paid within 5 years. Money is worth 8% compounded annually. Determine the
amount of each annual payment if all payments are made at the beginning of each year of the 5
years.
4. David who deposited a certain amount of money today and is supposed to receive 30 annual
payments of P5,000 each. However, the annuity will start 4 years from today and the applicable rate
of interest is 5%. Calculate the amount of money deposited if the annuity payment is supposed to be
made at the end of each year.
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