Narda's parents made P20,000 into an account that will earn an effective interest rate of 8% for 4 years and 6 months. Narda will be able to claim the maturity value of this fund after this term has elapsed. But Narda insists to use an annual effective discount rate of 5% per year to find the present value of the amount she is supposed to receive at maturity. How much approximately is the present value calculated by Narda?( ·
Narda's parents made P20,000 into an account that will earn an effective interest rate of 8% for 4 years and 6 months. Narda will be able to claim the maturity value of this fund after this term has elapsed. But Narda insists to use an annual effective discount rate of 5% per year to find the present value of the amount she is supposed to receive at maturity. How much approximately is the present value calculated by Narda?( ·
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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Transcribed Image Text:10
Narda's parents made P20,000 into an
account that will earn an effective
interest rate of 8% for 4 years and 6
months. Narda will be able to claim the
maturity value of this fund after this
term has elapsed.
But Narda insists to use an annual
effective discount rate of 5% per year
to find the present value of the amount
she is supposed to receive at maturity.
How much approximately is the present
value calculated by Narda?(
17,620
22,450
22,700
O 35,620
36,250
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