Solve the following problems: (Draw the cash-flow diagram if necessary in each problem ) 5) A young student wishes to go on a trip around Asia ten years from now. To prepare for such travel, he deposited now an amount of P 1,000 on an account on a bank that pays 8% compounded monthly. Then, he wishes to continue his deposits every end-of a month for ten years with increasing amounts. If his monthly deposits increases by 10% starting from the first to the last deposit, a) what amount would this student expects be on his account before the said travel, assuming no withdrawals take place? b) if after seven years of monthly deposits, the student wishes to withdrew all of his money on his account, how much would it be?
Solve the following problems: (Draw the cash-flow diagram if necessary in each problem ) 5) A young student wishes to go on a trip around Asia ten years from now. To prepare for such travel, he deposited now an amount of P 1,000 on an account on a bank that pays 8% compounded monthly. Then, he wishes to continue his deposits every end-of a month for ten years with increasing amounts. If his monthly deposits increases by 10% starting from the first to the last deposit, a) what amount would this student expects be on his account before the said travel, assuming no withdrawals take place? b) if after seven years of monthly deposits, the student wishes to withdrew all of his money on his account, how much would it be?
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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Transcribed Image Text:Solve the following problems: ( Draw the cash-flow diagram if necessary in each
problem )
5) A young student wishes to go on a trip around Asia ten years from now. To
prepare for such travel, he deposited now an amount of P 1,000 on an
account on a bank that pays 8% compounded monthly. Then, he wishes to
continue his deposits every end-of a month for ten years with increasing
amounts. If his monthly deposits increases by 10% starting from the first to
the last deposit,
a) what amount would this student expects be on his account before the said
travel, assuming no withdrawals take place?
b) if after seven years of monthly deposits, the student wishes to withdrew
all of his money on his account, how much would it be?
6) A house and lot was offered for sale for P 10 million if paid in cash.
However, an instalment basis is an option wherein the buyer needs to pay P
2.5 million as down payment and remaining balance be paid after within a
five-year period. Payments are of the following condition: an equal-end of a
quarter payments of P 600, 000 for a period of two years, then an end of a
monthly payments for a period of three years in which monthly payments
decreases by P 1000 until the last monthly payment. Money is 12%
effective.
a) What was the amount of the first monthly payment?
b) What was the amount of the 20th monthly payment?
c) Find the sum of all the payments.
d) If remaining balance be paid by an equal-end of a semi-annual payments
instead of the above condition, how much would it then be?
7) A certain property was offered in an instalment basis with no down payment
for six years. However, the buyer needs to pay immediately a beginning of a
monthly payment for a period of two years starting at an amount of P 4, 500
and succeeding monthly payments increases by P 800 until the last monthly
payment. After such, payments become an end of a quarterly payments
starting at an amount of P 25, 000 for the remaining period in which
quarterly payments decreases by 6% every quarter thereof until the last
quarterly payment. Money is 14% effective. a) What was the cash price of
the said property?
b) What equivalent uniform end of a semi-annual amounts would the
payments be instead of the said condition above?
c) Find the sum of all the payments being made.
d) If after three years of payments, the buyer wishes to pay a single amount
in order to settle all of his remaining obligations, how much would it be?
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