1 May deposits PhP 20,000 into a fund at the beginning of each year for 10 years. At the end of 15 years, she makes an additional deposit of X. At the end of 20 years, May uses the accumulated balance in the fund to buy a perpetuity- immediate with annual payments of PhP 30,000 per year for 10 years, and PhP 15,000 per year thereafter. Interest is credited at an annual effective rate of 6%. Calculate X.
1 May deposits PhP 20,000 into a fund at the beginning of each year for 10 years. At the end of 15 years, she makes an additional deposit of X. At the end of 20 years, May uses the accumulated balance in the fund to buy a perpetuity- immediate with annual payments of PhP 30,000 per year for 10 years, and PhP 15,000 per year thereafter. Interest is credited at an annual effective rate of 6%. Calculate X.
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
Problem 1PS
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Calculate X
Transcribed Image Text:1
May deposits PhP 20,000 into a fund at the beginning of each year for 10
years.
At the end of 15 years, she makes an additional deposit of X.
At the end of 20 years, May uses the accumulated balance in the fund to buy a perpetuity-
immediate with annual payments of PhP 30,000 per year for 10 years, and PhP 15,000
per year thereafter.
Interest is credited at an annual effective rate of 6%. Calculate X.
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