Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 28P
Related questions
Question
Topic: Ordinary annuity
Use these Formula:
Present Value: P=C [1-(1+i)^-n/i]
Future Value : F=C [(1+i)^n -1/i)]
Please use manual solving, final answer is already in the picture.
Transcribed Image Text:7.) John borrowed P4500 cash from his friend. His friend's condition is that he
must pay his debt in 2 years with an interest of 3% one time payment only.
However, john plans to set aside an amount of money in his piggy bank every
3months with an interest of 4% compounded quarterly until he can
accumulate the total debt and pay it one time to his friend. How much money
must John set aside every 3months? ANSWER: A = P559.3995
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