Mr. Dela Paz is thinking of buying a new car in 5 years. He estimated that he needs to have Php800,000.00 in 5 years. In order to achieve his goal, he decided to make a deposit today at an account that gives 5% interest compounded semiannually. How much deposits does Mr. Paz

Mr. Dela Paz is thinking of buying a new car in 5 years. He estimated that he needs to have Php800,000.00 in 5 years. In order to achieve his goal, he decided to make a deposit today at an account that gives 5% interest compounded semiannually. How much deposits does Mr. Paz

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 13E

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

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Mr. Dela Paz is thinking of buying a new car in 5 years. He estimated that he needs to have
Php800,000.00 in 5 years. In order to achieve his goal, he decided to make a deposit today at an
account that gives 5% interest compounded semiannually. How much deposits does Mr. Paz
need? (10 points)

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