Answer number 3 1. A person wishes to accumulate P2,500 over a period of 15 yrs so that a cash payment can bemade for a new roof on a summer cottage. To have this amount when it is needed, annualpayments will be made into a savings account that earns 8% interest per year. How much musteach annual payment be? Draw a cash flow diagram.2. Mrs. X has just purchased a new car for 1M. She makes a down payment of 30% of thenegotiated price and then makes payments of P15,000 per month thereafter for 60 months.Furthermore, she believes the car can be sold for P750,000 at the end of 3 years. Draw a cashflow diagram of this situation from Mrs. X's point of view.3. An individual makes 6 annual deposits of P2,000 in a savings account that pays interest rate of4% compounded annually. Two years after making the last deposit, the interest rate changesto 7% compounded annually. Ten years after the last deposit, the accumulated money iswithdrawn from the account. How much is withdrawn?4. What value of N comes closest to making the upper cash flow diagram (a) equivalent to theone below (b)? Let i = 15% per annum.YearsN=?(a)

Future Value is used to determine the bank account balance after certain period in which deposited…

3. An individual makes 6 annual deposits of P2,000 in a savings account that pays interest rate of 4% compounded annually. Two years after making the last deposit, the interest rate changes to 7% compounded annually. Ten years after the last deposit, the accumulated money is withdrawn from the account. How much is withdrawn?

3. An individual makes 6 annual deposits of P2,000 in a savings account that pays interest rate of 4% compounded annually. Two years after making the last deposit, the interest rate changes to 7% compounded annually. Ten years after the last deposit, the accumulated money is withdrawn from the account. How much is withdrawn?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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