Activity 4: Give Me the Cash Value of the following ordinary annuities. Use the formula: P = R E); Cash value = Down payment + present value 1. The buyer of a lot pays P 50,000 andP 10,000 every month for 10 years and is worth 8% compounded monthly. 2. Brian paid P 135,000 as down payment for a car and will pay P 18,000 every month that is worth 9% compounded monthly for 4 years.
Activity 4: Give Me the Cash Value of the following ordinary annuities. Use the formula: P = R E); Cash value = Down payment + present value 1. The buyer of a lot pays P 50,000 andP 10,000 every month for 10 years and is worth 8% compounded monthly. 2. Brian paid P 135,000 as down payment for a car and will pay P 18,000 every month that is worth 9% compounded monthly for 4 years.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
Related questions
Question
Solve for the activity no.4
Transcribed Image Text:Find: cash value or cash price of the car
Solution.
The time diagram for the installment payments is given by:
16200
16200
16200
16200
2
60
The present value of this ordinary annuity is given by
P =R (1+j)-n
P = 16,200 1-(1+0.00875)-60
16,200 1-(1.00875)-60
0.00875
0.00875
P = 753,702.20
Cash value = Down payment + present value
= 200,000 + 753,702.20
Cash Value = P 953,702.20
Activity 4: Give Me the Cash Value of the following ordinary
annuities.
Use the formula: P = R
EdD"; Cash value = Down payment
+ present value
1. The buyer of a lot pays P 50,000 and P 10,000 every month for 10 years and
is worth 8% compounded monthly.
2. Brian paid P 135,000 as down payment for a car and will pay P 18,000 every
month that is worth 9% compounded monthly for 4 years.
Periodic payment R of an Annuity
Periodic payment R can also be solved using the formula for amount F or
present value P of an annuity.
F =
R= F/"-
P =
R = P/ E
where :
R is the regular payment;
P is the present value of an annuity
F is the future value of an annuity
j is the interest rate per period;
n is the number of payments
Example 5. Paolo borrowed P 100 000. He agrees to pay the principal plus interest
onch vear for 3 years. What should be
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