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
Related questions
Question
No.5. Please use the formula on the 2nd pic. STEP BY STEP SOLUTION PLEASE, I CANNOT UNDERSTAND EXCEL
![1. Mr. Moreno started to deposit Php. 5,500 quarterly in a fund
that pays 2.5% compounded monthly. How much will be in the
fund after 6 years?
2. The buyer of a lot pays Php. 50,000 cash and Php. 14,500 every
month for 10 years. If money is 8% compounded annually, how
much is the cash value of the lot?
3. How much should be invested in a fund each year paying 3%
compounded semi-annually to accumulate Php. 150,000 in 6
years?
4. A high school student would like to save Php. 60,000 for his
graduation. How much should he deposit in a savings account
every 3 months for 6 years if interest rate is a 0.25%
compounded monthly?
5. A television (TV) set is for sale at Php. 13,499 in cash or on
installment terms, Php. 2,599 each month for the next 6 months
at 8.9% compounded quarterly. If you were the buyer, what
would you prefer, cash or installment?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2c9e4746-94d2-4988-a09a-4b4730d8a632%2F2ca3f969-5e74-4858-ba72-5bb52f8d34f3%2Frq2zpj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. Mr. Moreno started to deposit Php. 5,500 quarterly in a fund
that pays 2.5% compounded monthly. How much will be in the
fund after 6 years?
2. The buyer of a lot pays Php. 50,000 cash and Php. 14,500 every
month for 10 years. If money is 8% compounded annually, how
much is the cash value of the lot?
3. How much should be invested in a fund each year paying 3%
compounded semi-annually to accumulate Php. 150,000 in 6
years?
4. A high school student would like to save Php. 60,000 for his
graduation. How much should he deposit in a savings account
every 3 months for 6 years if interest rate is a 0.25%
compounded monthly?
5. A television (TV) set is for sale at Php. 13,499 in cash or on
installment terms, Php. 2,599 each month for the next 6 months
at 8.9% compounded quarterly. If you were the buyer, what
would you prefer, cash or installment?
![Ordinary Simple Annuity
(1+)
-1
FV = PMT
MISSING
FUTURE VALUE
PMT = FV
MISSING PMT
mt
1+
WHEN FUTURE VALUE IS GIVEN
-mt
1-(1+
PV = PMT
MISSING
PRESSENT VALUE
PMT = PV
MISSING PMT
„G+1)-1
WHEN PRESENT VALUE IS GIVEN
-me
Ordinary General Annuity
m,
1 +
m,
i = m
- 1
CONVERTION
OF 1,"
TO i
Deferred Annuity
-(k+mt)
1-(1+)
1-(1+5)*
PV = PMT
PMT
/-
PRESENT VALUE OF DEFERRED
ANNUITY
2(1 + +)* - (1 + #)
-(k+mt)
PMT*m
PV =
i
PRESENT VALUE OF DEFERRED
ANNUITY](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2c9e4746-94d2-4988-a09a-4b4730d8a632%2F2ca3f969-5e74-4858-ba72-5bb52f8d34f3%2F6ahamec5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Ordinary Simple Annuity
(1+)
-1
FV = PMT
MISSING
FUTURE VALUE
PMT = FV
MISSING PMT
mt
1+
WHEN FUTURE VALUE IS GIVEN
-mt
1-(1+
PV = PMT
MISSING
PRESSENT VALUE
PMT = PV
MISSING PMT
„G+1)-1
WHEN PRESENT VALUE IS GIVEN
-me
Ordinary General Annuity
m,
1 +
m,
i = m
- 1
CONVERTION
OF 1,"
TO i
Deferred Annuity
-(k+mt)
1-(1+)
1-(1+5)*
PV = PMT
PMT
/-
PRESENT VALUE OF DEFERRED
ANNUITY
2(1 + +)* - (1 + #)
-(k+mt)
PMT*m
PV =
i
PRESENT VALUE OF DEFERRED
ANNUITY
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