1. You are planning to save enough money to buy a brand new car five years from now. You are setting a budget of Php 1,000,000 for this purchase. Your plan is to accumulate the amount by making three savings deposits at an interest rate of 10%. Deposit 1: Deposit Php 100,000 today, Deposit 2: Deposit Php 150,000 two years from now, Deposit 3: Deposit an amount Php X three years from now. How much do you need to invest in year three to ensure that you have the necessary fund to buy the new car at the end of year five?
1. You are planning to save enough money to buy a brand new car five years from now. You are setting a budget of Php 1,000,000 for this purchase. Your plan is to accumulate the amount by making three savings deposits at an interest rate of 10%. Deposit 1: Deposit Php 100,000 today, Deposit 2: Deposit Php 150,000 two years from now, Deposit 3: Deposit an amount Php X three years from now. How much do you need to invest in year three to ensure that you have the necessary fund to buy the new car at the end of year five?
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 1hM
Related questions
Question
SUBJECT: ENGINEERING ECONOMICS
INSTRUCTION: Answer the following questions by including the appropriate cash flow diagrams, solution, and final answer.
1. You are planning to save enough money to buy a brand new car five years from now. You are setting a budget of Php 1,000,000 for this purchase. Your plan is to accumulate the amount by making three savings deposits at an interest rate of 10%.
Deposit 1: Deposit Php 100,000 today,
Deposit 2: Deposit Php 150,000 two years from now,
Deposit 3: Deposit an amount Php X three years from now. How much do you need to invest in year three to ensure that you have the necessary fund to buy the new car at the end of year five?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT