On the day his son was born, a father deposited to a trust company a sufficient amount of money so that his son could receive money in the future. There was a provision that the son can withdraw an amount of P10,000 each year for 3 years starting on his 13th birthday and P16,600 ten months after the last withdrawal. The interest rate is 6% compounded monthly. What is the effective interest rate? How much did the father deposit? How much money can he receive on his 13th birthday, if he decided to withdraw all the money at once
On the day his son was born, a father deposited to a trust company a sufficient amount of money so that his son could receive money in the future. There was a provision that the son can withdraw an amount of P10,000 each year for 3 years starting on his 13th birthday and P16,600 ten months after the last withdrawal. The interest rate is 6% compounded monthly. What is the effective interest rate? How much did the father deposit? How much money can he receive on his 13th birthday, if he decided to withdraw all the money at once
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
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On the day his son was born, a father deposited to a trust company a sufficient amount of money so that his son could receive money in the future. There was a provision that the son can withdraw an amount of P10,000 each year for 3 years starting on his 13th birthday and P16,600 ten months after the last withdrawal. The interest rate is 6% compounded monthly.
What is the effective interest rate?
How much did the father deposit?
How much money can he receive on his 13th birthday, if he decided to withdraw all the money at once?
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