559. 1. Compute the nominal interest rate. 2. Determine how much will she receive at the end of 20 years. 3. Determine the worth of the sinking fund factor in this fund invested.
559. 1. Compute the nominal interest rate. 2. Determine how much will she receive at the end of 20 years. 3. Determine the worth of the sinking fund factor in this fund invested.
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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Question
Provide manual solutions for below mentioned problems.
A social worker deposits a uniform amount of P12,000 at the end of each year in order to get a lump sum of money by the time she will retire at the end of 20 years. If the compound amount factor for this
1. Compute the nominal interest rate.
2. Determine how much will she receive at the end of 20 years.
3. Determine the worth of the sinking fund factor in this fund invested.
Answer. 1. 6% 2. P441,427.08 3. 0.027184557
Transcribed Image Text:Problem 1
A social worker deposits a uniform amount of P12,000 at the cnd of cach ycar in order to get a
lump sum of money by the time she will retire at the end of 20 years. If the compound amount
factor for this annuity is equal to 36.78559.
1. Compute the nominal interest rate.
2. Determine how much will she receive at the end of 20 years.
3. Determine the worth of the sinking fund factor in this fund invested.
Ans.
1. 6%
2. P441,427.08
3. 0.027184557
Expert Solution
Step 1
In this we need to calculate interest rate from the given future value factor.
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