Provide manual solutions to below mentioned problems. An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first payment? 2. What is the sum of this annuity at the end of the 18th year? 3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Answer. 1. P329,141.72 2. P666,780.73 3. P25,645.41
Provide manual solutions to below mentioned problems. An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first payment? 2. What is the sum of this annuity at the end of the 18th year? 3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Answer. 1. P329,141.72 2. P666,780.73 3. P25,645.41
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 12PROB
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Question
Provide manual solutions to below mentioned problems.
An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually.
1. What is the
2. What is the sum of this annuity at the end of the 18th year?
3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year.
Answer. 1. P329,141.72 2. P666,780.73 3. P25,645.41
Transcribed Image Text:Problem 4
An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of
interest is 4% compounded annually.
1. What is the present value of this annuity at the time he is supposed to receive the first
payment?
2. What is the sum of this annuity at the end of the 18t year?
3. Find the difference between the sum of this annuity which is paid at the beginning of
each year and an annuity paid at the end of each year.
Ans. 1. P329,141.72
2. P666,780.73
3. P25,645.41
Expert Solution
Inputs
Annuity Amount = 25,000
Beginning of year receipts
N = 18 years
Interest Rate = 4%
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