A group of friends decided to save money so they can travel out of the country after 5years. The plan is for each to make semi-annual deposits of P10,000 in their respectivebank accounts starting at the end of the first semester after the agreement up to the 5thyear. All deposits are to be made at the end of the periods. One of them is not capableof starting at the same time with everyone because of a present obligation but promisedto start the deposits by the end of the first semester after the second year until the 5thyear. How much should she deposit in equal amounts to save as much as each of herfriends if money is worth 10% compounded semi-annually?

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Answered: A group of friends decided to save…

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
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
A group of friends decided to save money so they can travel out of the country after 5 years. The plan is for each to make semi-annual deposits of P10,000 in their respective bank accounts starting at the end of the first semester after the agreement up to the 5th year. All deposits are to be made at the end of the periods. One of them is not capable of starting at the same time with everyone because of a present obligation but promised to start the deposits by the end of the first semester after the second year until the 5th year. How much should she deposit in equal amounts to save as much as each of her friends if money is worth 10% compounded semi-annually?
Three professional siblings decided to save money so they can buy a house and lot for their parents after 5 years. The plan is for each to make semi-annual deposits of P20,000 in their respective bank accounts starting at the end of the first semester after the agreement up to the 5th year. All deposits are to be made at the end of the periods. One of them is not capable of starting at the same time with everyone because of a present obligation but promised to start the deposits by the end of the first semester after the second year up to the 5 th year. How much should she deposit in equal amounts to save as much as each of her siblings if money is worth 13% compounded semi-annuallydraw Cash Flow Diagrams.
Three students decided to save money so they can buy a house and lot fortheir parents after 5 years. The plan is for each to make semi-annual deposits of P20,000in their respective bank accounts starting at the end of the first semester after theagreement up to the 5th year. All deposits are to be made at the end of the periods. Oneof them is not capable of starting at the same time with everyone because of a presentobligation but promised to start the deposits by the end of the first semester after thesecond year up to the 5th year. How much should she deposit in equal amounts to saveas much as each of her siblings if money is worth 13% compounded semi-annually?
Kate deposits P5,000 to her bank account every year when she was in highschool for four years to prepare for her college degree. She took an engineering course and since then, she stopped depositing to her bank account. Right after graduation (she graduated ontime), she got a job that pays P250,000ayear. If she continues to deposit to the same bank account P50,000 every year for 10 years, calculate the future worth after 30 years if the deposits are made at the end of each year and the bank pays 2% interest per year
When enrolling at the University, he signed a bill of exchange for an amount of ¢180,000.00 with a term of 90 days. The current interest charged is 5% per year and the default interest is 3% per month, you are planning your finances and you cannot cancel on the due date, so you must cancel with a delay of 25 days, it is requested: a) Calculate the amount of current interest b) Calculate the amount of default interest d) What annual effective interest rate (TEA) will you end up paying?
Kate deposited P5,000 to her bank account every year when she was in high school for four years to prepare for her college degree. She took an engineering course and since then, she stopped depositing to her bank account. Right after graduation (she graduated on time), she got a job that pays P250,000 a year. If she continues to deposit to the same bank account P50,000 every year for 10 years, calculate the future worth after 30 years if the deposits are made at the end of each year and the bank pays 2% interest per year. *Please show your correct and complete solutions to this problem. Thank you!*

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