4.) FEU has been bought by an individual. It is to be paid 4% compounded semi-annually, eight times a year for 10years with an amount of 3.8Million per payment. If the payment i is to start 4 years from today. What is the accumulated amount after 25 years? ANSWER: F = P575.2216 Million

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
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Please help use the formula below and show the complete solution
4.) FEU has been bought by an individual. It is to be paid 4% compounded
semi-annually, eight times a year for 10years with an amount of 3.8Million
per payment. If the payment is to start 4 years from today. What is the
accumulated amount after 25 years? ANSWER: F=P575.2216 Million
Transcribed Image Text:4.) FEU has been bought by an individual. It is to be paid 4% compounded semi-annually, eight times a year for 10years with an amount of 3.8Million per payment. If the payment is to start 4 years from today. What is the accumulated amount after 25 years? ANSWER: F=P575.2216 Million
FORMULAS
F=A(-
P=A(-
(1+i)-1
i
1- (¹+i)-yn
-)(1+i)ym
-) (1+i)-ym
F-Future Worth
P-Present Worth
A - Annuity
y-yrs
n-method of compounding
i-interest rate
m-delayed years
Transcribed Image Text:FORMULAS F=A(- P=A(- (1+i)-1 i 1- (¹+i)-yn -)(1+i)ym -) (1+i)-ym F-Future Worth P-Present Worth A - Annuity y-yrs n-method of compounding i-interest rate m-delayed years
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