Answer number 1 and 2: 1.) You just deposited P2,500 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another P5,000 to the account one year (4 quarters) from now and another P7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now? 2.) Suppose you borrowed P15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year?
Answer number 1 and 2: 1.) You just deposited P2,500 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another P5,000 to the account one year (4 quarters) from now and another P7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now? 2.) Suppose you borrowed P15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year?
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
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Answer number 1 and 2:
1.) You just deposited P2,500 in a bank account that pays a 4.0% nominal interest rate, compounded quarterly. If you also add another P5,000 to the account one year (4 quarters) from now and another P7,500 to the account two years (8 quarters) from now, how much will be in the account three years (12 quarters) from now?
2.) Suppose you borrowed P15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year?
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