1. ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years?2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years?3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years?Note: Please use the formula below. Future Value of MoneyTime Value of Money Formula(n xt)Future Valueof Money=Present Valueof MoneyPV X (1+1)FV(nxt)(1 + + ) (^X²)-n PRESENT AND FUTUREVALUEFUTURE VALUEDefinition: The rising value of a today'ssum at a specified future date given at aspecified rate of interest.Formulae:FV = PV (1+r)nwhere;PV = Present Value / Principal AmountFV = FV of the initial principal n yearshenceR= Rate of Interest Per annumN = number of years for which theamount has been invested.PRESENT VALUE▪ Definition: The today's value of a singlepayment or series of payment to bereceived at a later date, given at a specifieddiscount rate.Formulae:PV = FV * 1/(1+r)nwhere;PV = Present value or the principal amountFV = FV of the initial principal n yearshenceR = Rate of Interest per annumN = number of years for which theamount have been invested.

Given The amount deposited every year is P50,000 Number of years is 3

Answered: ABCD Company is an investor in oil…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter15: Capital Investment Analysis

Section: Chapter Questions

Problem 3SEQ: The expected period of time that will elapse between the date of a capital investment and...

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1. ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years? 2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years? 3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years? Note: Please use the formula below.

Future Value of Money
Time Value of Money Formula
(n xt)
Future Value
of Money
=
Present Value
of Money
PV X (1+1)
FV
(nxt)
(1 + + ) (^X²)
-
n

PRESENT AND FUTURE
VALUE
FUTURE VALUE
Definition: The rising value of a today's
sum at a specified future date given at a
specified rate of interest.
Formulae:
FV = PV (1+r)n
where;
PV = Present Value / Principal Amount
FV = FV of the initial principal n years
hence
R= Rate of Interest Per annum
N = number of years for which the
amount has been invested.
PRESENT VALUE
▪ Definition: The today's value of a single
payment or series of payment to be
received at a later date, given at a specified
discount rate.
Formulae:
PV = FV * 1/(1+r)n
where;
PV = Present value or the principal amount
FV = FV of the initial principal n years
hence
R = Rate of Interest per annum
N = number of years for which the
amount have been invested.

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