Answered: how much money had accumulated at the…

Business

Accounting

how much money had accumulated at the end of the 5th year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Profits generated by SM Prime Holdings were ₱100 million for the first year and increased by ₱10 million

each year. If the profits for 5 years of operation were invested at 12% rate of return, how much money

had accumulated at the end of the 5th year?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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