12. A man deposited a certain amount when his son was born, at a rate of 12% per annum, with the intention that his son can withdraw P10,000 per year for 5 years starting on the son's 18th birthday. However, the trust company offers the son an option, that he may not make withdrawals but he can withdraw the money as a lump sum on his 25th birthday, and the son selected the option. Find the amount deposited by the man and the amount withdrawn by the son.

12. A man deposited a certain amount when his son was born, at a rate of 12% per annum, with the intention that his son can withdraw P10,000 per year for 5 years starting on the son's 18th birthday. However, the trust company offers the son an option, that he may not make withdrawals but he can withdraw the money as a lump sum on his 25th birthday, and the son selected the option. Find the amount deposited by the man and the amount withdrawn by the son.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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On the day Michel was born, his grandfather deposited to a trust company a sufficient amount of money so that michel could receive the annual payments of Php 20,000 each for his college tuition, starting wiht his 18th birhtday. Interest at the rate of 12% per annum was to be paid on all amounts of deposit. There was also a provision that the grandson could elect to withdraw no annual payments and receive lump on his 25th birthday. Michel chose this option. How much did his grandfather deposit?
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