4. Jamie has become more conscientious about paying off his credit card bill promptly to reduce the amount of interest paid. He was surprised to learn that he paid P 400 in interest in 2007 and the amounts shown in Figure 2.3 over the previous several years. If he made his payments to avoid interest charges, he would have these funds plus earned interest available in the future. What is the equivalent amount 5 years from now that Jamie could have available had he not paid the interest penalties? Let i = 5% per year. Draw cash flow diagram. Year 2002 2003 2004 2005 2006 2007 Interest paid, $ 600 300 400
4. Jamie has become more conscientious about paying off his credit card bill promptly to reduce the amount of interest paid. He was surprised to learn that he paid P 400 in interest in 2007 and the amounts shown in Figure 2.3 over the previous several years. If he made his payments to avoid interest charges, he would have these funds plus earned interest available in the future. What is the equivalent amount 5 years from now that Jamie could have available had he not paid the interest penalties? Let i = 5% per year. Draw cash flow diagram. Year 2002 2003 2004 2005 2006 2007 Interest paid, $ 600 300 400
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:4. Jamie has become more conscientious about paying off his credit card bill promptly to reduce the
amount of interest paid. He was surprised to learn that he paid P 400 in interest in 2007 and the
amounts shown in Figure 2.3 over the previous several years. If he made his payments to avoid
interest charges, he would have these funds plus earned interest available in the future. What is the
equivalent amount 5 years from now that Jamie could have available had he not paid the interest
penalties? Let i= 5% per year. Draw cash flow diagram.
Year
2002
2003
2004
2005
2006
2007
Interest paid, $
600
300
400
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