It is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of P100,000 on January 1, 2x20? 3. If you deposited P200,000 in a bank account that pays 6% interest annually, how much will be in your account after five (5) years? 4. What is the present value of a security that will pay P290,000 in 20 years if securities of equal risk pay 5% annually? 5. What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an annuity due, what would be its future value?
It is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds interest at an 8% annual rate. How much must you deposit today to have a balance of P100,000 on January 1, 2x20? 3. If you deposited P200,000 in a bank account that pays 6% interest annually, how much will be in your account after five (5) years? 4. What is the present value of a security that will pay P290,000 in 20 years if securities of equal risk pay 5% annually? 5. What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an annuity due, what would be its future value?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
It is now January 1, 2x16, and you will need P100,000 on January 1, 2x20. Your bank compounds interest
at an 8% annual rate. How much must you deposit today to have a balance of P100,000 on January 1,
2x20?
3. If you deposited P200,000 in a bank account that pays 6% interest annually, how much will be in your
account after five (5) years?
4. What is the present value of a security that will pay P290,000 in 20 years if securities of equal risk pay 5%
annually?
5. What is the future value of a 5%, 5-year ordinary annuity that pays P8,000 each year? If this was an annuity
due, what would be its future value?
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