On the day his grandson was born, a man deposited to a trust company so that the boy could receive five annual payments of P10,000 each for his college tuition fees, starting with his 18th birthday. Interest at the rate of 12% per annum was to be paid on all amounts on deposit. There was also a provision that the grandson could elect to withdraw the lump sum on his 25th birthday. The grandson chose this option. Draw a cash-flow diagram Question: (a) How much did the boy receive as a single payment? (b) How much did the grandfather deposit? 2. A car is to be paid P15,000 at 9% interest rate. What is the equivalent amount of car after 9 years at an annual interest rate of 6% compounded quart
On the day his grandson was born, a man deposited to a trust company so that the boy could receive five annual payments of P10,000 each for his college tuition fees, starting with his 18th birthday. Interest at the rate of 12% per annum was to be paid on all amounts on deposit. There was also a provision that the grandson could elect to withdraw the lump sum on his 25th birthday. The grandson chose this option. Draw a cash-flow diagram Question: (a) How much did the boy receive as a single payment? (b) How much did the grandfather deposit? 2. A car is to be paid P15,000 at 9% interest rate. What is the equivalent amount of car after 9 years at an annual interest rate of 6% compounded quart
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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1. On the day his grandson was born, a man deposited to a trust company so that the boy could receive five annual payments of P10,000 each for his college tuition fees, starting with his 18th birthday. Interest at the rate of 12% per annum was to be paid on all amounts on deposit. There was also a provision that the grandson could elect to withdraw the lump sum on his 25th birthday. The grandson chose this option. Draw a cash-flow diagram
Question: (a) How much did the boy receive as a single payment? (b) How much did the grandfather deposit?
2. A car is to be paid P15,000 at 9% interest rate. What is the equivalent amount of car after 9 years at an annual interest rate of 6% compounded quarterly.
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