A woman is considering giving an endowment to a university in order to provide payments of P55,000, P85,000, respectively, at the end of the first, and second semiannual during a year. If the interest rate is 12% compounded quarterly, what is the capitalized equivalent that must be deposited now so that the semiannual payments can be repeated forever?
A woman is considering giving an endowment to a university in order to provide payments of P55,000, P85,000, respectively, at the end of the first, and second semiannual during a year. If the interest rate is 12% compounded quarterly, what is the capitalized equivalent that must be deposited now so that the semiannual payments can be repeated forever?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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A woman is considering giving an endowment to a university in order to provide payments of P55,000, P85,000, respectively, at the end of the first, and second semiannual during a year. If the interest rate is 12% compounded quarterly, what is the capitalized equivalent that must be deposited now so that the semiannual payments can be repeated forever?
Draw the cash flow diagram and use interest rate with five decimal places.
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