A father wishes to provide P5,000.00 for his son on his 21st birthday. How much should be deposited every 6 months in a savings bank which pays 5% compounded semi-annually, if the first deposit is made when the son is 4 years old? O a. P31.74 O b. P61.74 O c. P51.74 O d. P41.74

A father wishes to provide P5,000.00 for his son on his 21st birthday. How much should be deposited every 6 months in a savings bank which pays 5% compounded semi-annually, if the first deposit is made when the son is 4 years old? O a. P31.74 O b. P61.74 O c. P51.74 O d. P41.74

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: How would we compute the present discounted value of payments of $8,000 received three years in the…

A: The present discounted value gives the amount of dollars that an individual is willing to invest for…

Q: $5000 at time 0 is equivalent to: Select one: a. $7800 at the end of year 7, i=8% simple interest…

A: Answer: option c Explanation: Let us find the present value (value at time zero) of $6800 to see…

Q: Find the present value of a perpetuity of P5,000 payable semi-annually if money is worth 7%…

A: Perpetuity refers to an annuity that receives periodic payments for an infinite period. The present…

Q: F=? Find the balance at the end of year 4. 2% 12% 3% 5% $300 $500 S600 Select one: O 1904 O 1603 O…

A: Below is the given values: Amount at the start of 1st year = $500Amount at the start of 3rd year =…

Q: How long will it take for 10,000 to amount to 50,000 if the interest rate is 6% compounded annually?…

A: Present value is the value of investment in today's dollar. Future value is the value of investment…

Q: An annuity offers a payment of $5000 at the beginning of every three months for twenty years.…

A: here we determine the amount that would pay for this annuity today as follow by the following method…

Q: 48. Find the present worth of perpetuity of P10,000 semi annually with an interest rate of 10%…

A: The worth is the ratio of annuity to semiannual. It means that as the annuity is positively related…

Q: 1. amount payable at the end of a set period of time 2. a short-term contract requiring the issuer…

A: Interest rate is the cost of borrowing money or the return on investment for lending money. It is…

Q: What amount of money be deposited now at 4% interest will provide berpetual payment of P 2,000 which…

A: Perpetual payment = 2000 P Interest rate = 4 % Therefore present value of perpetual payment = 2000 /…

Q: • An electronic appliance is payable P1,000,12% compounded continuously. How much is the product…

A: Given Principal amount = 1000. Interest rate = 12% r = 0.12 Time = 10 years. And compounded…

Q: In order to buy an apartment unit, Meryl needs to spend a total of $300,000 today and equal monthly…

A: Total Amount spent today = 300,000 Monthly Payment = 2500 n = 26 years r = 7% compounded monthly

Q: Mr. Jones will invests P 5,000 in a fund at the end of each 6 months to accumulate P 100,000 to buy…

A: Since you have posted multiple questions as per the guidelines we can solve only one question per…

Q: Money is compounded annually at the rate of 6%, find the present value of a sequence of 12 semi-…

A: In the present worth method of comparison, the cash flows of each option will be decreased to time…

Q: Find the uniform annual amount that is equivalent to a uniform gradient series in which the first…

A: We have First year-end payment P1 =6800 Second year-end payment = 6550 Third year-end payment =6300…

Q: QUESTION 9 What is the effective monthly interest rate considering an APR of 6% compounded…

A: Compounding refers to the process of adding earned interest to the principal amount of an investment…

Q: Identify the following interest rates as nominal or effective: (ABET, SO1) A: 1%= 6% per semiannual,…

A: When comparing the nominal interest rate and effective interest rate, the primary difference between…

Q: Suppose you make equal quarterly deposits of $1,000 into a fund that pays interest a rate of 16% per…

A: One of the most crucial economic concepts, FV is based on the time value of money. Investors must be…

Q: Suppose you invest GH¢2000 at the end of each year of the next five years compounded at 10%. How…

Q: 1. Tonio wants to have P95,000 for his traveling expenses four years from now. How much must he save…

A: Disclaimer- “Since you have asked multiple question, we will solve the first question for you as per…

Q: What is the present equivalent (at EOY 0) of the following cash-flows if the annual interest rate is…

A: The present value of the cash flow is the present worth of cash now that will be received in the…

Q: How would we compute the present discounted value of payments of $8,000 received thre years in the…

A: The present discounted value gives the amount of dollars that an individual is willing to invest for…

Q: If money is worth 7%, obtain the present value of a perpetuity of P64,500.00 payable annually when…

Q: For the next 15 years, you will deposit $1,500 every month in a savings account. The account pays 6%…

A: Given information: You deposit $1500 every month in a savings account for the next 15 years. The…

Q: In order to buy an apartment unit, Meryl needs to spend a total of $550,000 today and equal monthly…

A: Formula of the future value for the one time payment: F = P (1 + R/n)n*t Where: F : Future value P…

Q: What is the nominal annual interest rate if the effective annual rate is 8.1% and compounding is…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: QUESTION 4 Suppose you invest $150.000 dollars in a savings account that earns 9% compounded…

Q: Assume that l2t = 0.15% and that t = 0. If the one-year interest rate is 5% and the two- year…

A: Given Liquidity premium for 2 period bond at time t (l2t)= 0.15% One year interest rate at today's…

Q: If you borrowed $12,000 payable in 6 equal annual installments, what would be the principal payment…

A: Yearly Installments implies a progression of sums to be paid yearly over a foreordained time of…

Q: 5. Suppose that as a lottery prize you win a trip worth $8,000. You are uninterested in the trip,…

A: Given that the lottery prize is worth $8000 redeem after three years from now Rate of interest =5%…

Q: One main assumption underlying the segmented markets theory is that: O A. All of the listed options…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: 2. Find the present worth of perpetuity of P 15,000 payable monthly if money is worth 10% compounded…

A: Given information Monthly payable amount=P15000 Annual interest rate=10% Payment period=12…

Q: The equivalent present value at time 0 of a $200 cash flow located in year 10 at an annual interest…

A: Present value is the present worth of the future cash flow. or it is also known as the discounted…

Q: son If you would like to have $400000 for your retired and you save equal amount monthly in a saving…

A: * SOLUTION :- Given that ,

Q: QUESTION 11 Five years from now, you would like to have $6,000 in your saving account. If your…

A: A savings account is a type of bank account where you can deposit and store your money while earning…

Q: If you deposit 3,000 SR in a saving account now. What would be theo difforence of the compounded and…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: accounts. How much will Mr. Jones have in his savings account in thirteen years if $50,000 is put in…

Q: How long in years will a certain sum of money to doubles its amount when deposited at a rate of 4%…

A: Formula for bi-monthly compounding is A = P(1 + (r/6) )6t

Q: An IT man buys boxes of diskettes and is to pay for it by making 30 monthly payments of P50 each,…

A: Number of period : 30 Monthly payments: 50 Yearly interest rate : 6 % Monthly interest rate : 0.005

Q: Six hundred pesos is deposited each year into a savings account that pays 6 % compounded…

A: Given Yearly deposit A =600 pesos Rate of interest =6% compounded continuously Time (n)=8 years We…

Question

A father wishes to provide P5,000.00 for his son on his 21st birthday. How much should be deposited every
6 months in a savings bank which pays 5% compounded semi-annually, if the first deposit is made when
the son is 4 years old?
O a. P31.74
O b. P61.74
O C.
P51.74
O d. P41.74

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Suppose that you make a series of annual deposits into a bank account that pays 10% interest. The initial deposit at the end of the first year is $1,200. The deposit amounts increase by $300 in each of the next 4 years. How much would you have immediately after the 5th deposit? O s10,642.42 O $9,000.00 O $11,705.56 O $8,925.12
Show solution
If you pay P 650 at the end of each month for 30 years on account that pays interest at 12% compounded monthly, how much money do you have after 30 years? O P5,271,726.69 O P3,271,726.69 O P2,271,726.69 O P4,271,726 69
Please see attachment and type out the correct step by step answer with proper explanation of the each option given within 40 50 minutes . Will give upvote only for the correct answer.thank you .
2.5. What equal-payment series is required to repay the following present amounts? a. $10,000 in 4 years at 10% interest compounded annually with 4 annual payments. b. $5,000 in 3 years at 12% interest compounded semiannually with 6 semiannual payments. c. $6,000 in 5 years at 8% interest compounded quarterly with 20 quarterly payments. d. $80,000 in 3o years at 9% interest compounded monthly with 360 monthly payments.
A loan of $245,000 is to be repaid in equal quarterly payments over a period of 6 years. If the interest rate is 12.5% compounded quarterly, what is the amount of unpaid principal at the beginning of the second year? O a. $182,425 O b. $181,650 c. $293,242 d. $215,635 O e. $215,188
please help solve
Peffers Inc. decided to set aside $10,000.00 at the beginning of each quarter for the next seven years. If this amount can yield a return rate of 12.35% compounded quarterly, what is the present value of this investment (round to the nearest cent)? O a. $768,579.17 O b. $782,139.10 O c. $326,222.99 O d. $331,978.50
Find the present value, in pesos, of a perpetuity of P20,000 payable semi-annually if money is worth 9% compounded quarterly. O a. P434,783.00 O b. P434,738.00 O c. P443,783.00 O d. P434,378.00
could you solve this? thank you...
Show complete solution and formula used. Please calculate it manually and write it in a paper. Provide cash flow diagram.
Hero borrowed P 200,000.00 with interest at the rate of 5% compounded semi-annually. He agrees to discharge his obligation by paying a series of 8 equal semi-annual payments, the first being due at the end of 5 1/2 years. Find the semi-annual payment. O a. P50,043.00 O b. P50,340.00 O c. P50,403.00 d. P50,430.00