required, encircle your final answer. Exercise. 1: Your grandparents have decided to sell their real estate property in the Province of Iloilo and they are planning to buy a property in Iloilo City. They posted an online advertisement for this. Two offers came: • Offer 1: P500,000 down payment plus P1,500,000 lump-sum payment 10 years from now Offer 2 : P500,000 down payment plus P12,500 per month for 10 years Which among the 2 offers should your grandparents choose if the payment will have an interest of 12% compounded monthly? Find the fair market value of the two offers. Exercise 2: Andy and Rose were recently married and they want to establish a trust fund that will serve as their savings fund for their future family. After 20 years, P1,000,000 will be paid to the couple per year for 10 years. The trust fund will earn an interest of 6% compounded semi-annually and is to be paid out semiannually. How much is the present value of this trust fund?
required, encircle your final answer. Exercise. 1: Your grandparents have decided to sell their real estate property in the Province of Iloilo and they are planning to buy a property in Iloilo City. They posted an online advertisement for this. Two offers came: • Offer 1: P500,000 down payment plus P1,500,000 lump-sum payment 10 years from now Offer 2 : P500,000 down payment plus P12,500 per month for 10 years Which among the 2 offers should your grandparents choose if the payment will have an interest of 12% compounded monthly? Find the fair market value of the two offers. Exercise 2: Andy and Rose were recently married and they want to establish a trust fund that will serve as their savings fund for their future family. After 20 years, P1,000,000 will be paid to the couple per year for 10 years. The trust fund will earn an interest of 6% compounded semi-annually and is to be paid out semiannually. How much is the present value of this trust fund?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
Related questions
Question
Transcribed Image Text:1 0.4511 179389
P P12500
I.
Background Information fo
0.01(1.488863734)
Time Diagram for a Deferred
0.54888611
P = P1250o
0.0148886373 4
P P12.500(36.86610786)
R°
R*
2 ...
P P460.826.35
1
In this time diagram, the perlc
R start at time k + 1.
II. Activity Proper
General Directions: In answering the exercises in the Learning Activity Sheet (LAS),
please be reminded not to write anything here. Alt answers must be written- in a separate
sheet of paper. Read each problem carefully and answer it systematically. If solution is
required, encircle your final answer.
The notation R* represents k
actually paid during the perio
Present Value of a Deffere
The present value of a deffe
Exercise 1: Your grandparents have decided to sell their real estate property in the
Province of Iloilo and they are planning to buy a property in Iloilo City. They posted an
online advertisement for this. Two offers came:
1-(1+-) *
P = R -
Offer 1: P500,000 down payment plus P1,500,000 lump-sum payment 10 years from
now
Offer 2 : P500,000 down payment plus P12,500 per month for 10 years
Which among the 2 offers should your grandparents choose if the payment will have an interest of
12% compounded monthly? Find the fair market value of the two offers.
where
R is the regular pay
r is the interest rate
m is the conversion
t is the time:
k is the number of
Exercise 2: Andy and Rose were recently married and they want to establish a trust fund that will
serve as their savings fund for their future family. After 20 years, P1,000,000 will be paid to the
couple per year for 10 years. The trust fund will earn an interest of 6% compounded semi-annually
and is to be paid out semiannually. How much is the present value of this trust fund?
Guide Questions
1. What clues are needed to determine the unknowns in the problem?
2. What are the steps that you need in solving for the market value?
Example 1: On the 40th birthdar
plan will allow him to claim P10
birthday. What one-time payme
pension plan, if the interest rate
Solution:
III. Reflection
Instruction. Reflect on the following questions and write Your resnonse
YOur inurnal
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