2. Assume that on March 1, 2020 Floryn Company is to make annual investment of Php 200,000 for four years. The interest for this investment was pegged at 9%. The investment is made every year end. What is the future value of this annuity?

2. Assume that on March 1, 2020 Floryn Company is to make annual investment of Php 200,000 for four years. The interest for this investment was pegged at 9%. The investment is made every year end. What is the future value of this annuity?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 13E

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

Answer no. 2

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decimal places. Use continuous decimal during computation for uniformity of
final answers.
1. Assume that on January 1, 2020 Aldous invested Php 100,000 in a financing
company. Aldous would like to find out what would be the worth of his Php
100,000 after 5 years with an interest rate pegged at 8%.
2. Assume that on March 1, 2020 Floryn Company is to make annual investment of
Php 200,000 for four years. The interest for this investment was pegged at 9%.
The investment is made every year end. What is the future value of this annuity?
3. Pharsa wants to pay equal annual investment amounting to Php 200,000 for 3
years. The prevailing interest rate for this investment is 10%. How much is the
discounted value of the three-year payments to be recognized by Pharsa if the
first payment will be made at the start of the first year?
4. Assume that Popol promised to pay Php 100,000 per year in perpetuity, how
much is the PV of infinite Php 100,000 payments be worth if the interest rate is
10%? 15%? 20%?

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