ANNUITY(Draw the cash flow diagram for each problem)1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%,what is the total peso amount upon the deposit of the sixth payment?2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annualinterest rate of 7%, how much can be withdrawn after 6 years?3. A fund is to provide an annual scholarship at P4,000.00 for the first 5 years; P6,000.00 forthe next 5 years and P9,000.00 thereafter. The fund will be established 1 year before thefirst scholarship is awarded. If the fund earns 12% interest, what sum must be deposited?4. A man paid 10% as down payment of P200,000.00 for a house and lot and agreed to paythe balance on monthly instalments for 5 years at an interest rate of 15% compoundedmonthly. What was the monthly instalment in pesos?5. An investor deposits P10,000.00 at the end of each year in an account which gives anominal annual interest of 5% compounded continuously. How much sum will heaccumulate in 10 years?

The questions here pertain to annuity. An annuity is a stream of constant cash flow that occurs at…

1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%, what is the total peso amount upon the deposit of the sixth payment? 2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annual interest rate of 7%, how much can be withdrawn after 6 years?

1. If P500.00 is invested at the end of each year for 6 years at an annual interest rate of 7%, what is the total peso amount upon the deposit of the sixth payment? 2. If P500.00 is deposited in an account at the beginning of each year for 6 years at an annual interest rate of 7%, how much can be withdrawn after 6 years?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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