Find the present value, in pesos, of an annuity of P20,000 payable annually for 8 years, with the first payment at the end of 5 years if money is worth 10%.
Find the present value, in pesos, of an annuity of P20,000 payable annually for 8 years, with the first payment at the end of 5 years if money is worth 10%.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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4. Please use the formula to solve the problem
Transcribed Image Text:Find the present value, in pesos, of an annuity of
P20,000 payable annually for 8 years, with the first
payment at the end of 5 years if money is worth 10%.
Add your answer
![Legend:
Cc - Capitalized Cost (Currency)
Fc - First Cost (Currency)
Mc - maintenance Cost (Currency)
Rc - Replacement Cost (Currency); if no Re: Re Fe
Sy- Salvage Value (Curency); if no Sy: Sy = 0
A - Periodic Amount (Currency)
F-Future Value (Currency)
G - Periodic Amount Increment Amount (Currency)
P - Present Value (Currency)
g - Periodic Amount Increment Rate (Persentage)
i-Nominal Interest Rate (Percent)
m - Number of Periods per Year (Number)
r - Effective Interest Rate (Percent)
t-Number of Years (Number)
Formulae:
Compounding Transformation (i, (m₂)→ 1₂ (m₂)): (1 + ) = (1 +)**
Perpetuity (t=00):
Ordinary Annuity (Payment at End of Period):
P=A1-(1+1)-²)
Arithmetic Gradient:
Geometric Gradient:
Capitalized Cost:
n = mt
Annuity Due (Payment at Beginning of Period):
r=-
m
F = P(1+r)"
P = F(1+r)-R
F=A
F=A
= A ((1+r)^²-1)
F=
P=A (1-(1+r)^)(1+r)
= A (¹ + r)² - 1) (1 + r)
T
FA[(1+r)-1]G[-nr + (1+r)" - 1]
T
r2
A[(1+r)"-(1+g)"]
T-9
Re-Sy
Cc=Fc++ (1+r)"-1
A = Cer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7053b554-3a97-4d68-beed-d147b9a2b76e%2F89f6cba5-2a95-4d84-afb4-936150774f9f%2F0whmzv_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Legend:
Cc - Capitalized Cost (Currency)
Fc - First Cost (Currency)
Mc - maintenance Cost (Currency)
Rc - Replacement Cost (Currency); if no Re: Re Fe
Sy- Salvage Value (Curency); if no Sy: Sy = 0
A - Periodic Amount (Currency)
F-Future Value (Currency)
G - Periodic Amount Increment Amount (Currency)
P - Present Value (Currency)
g - Periodic Amount Increment Rate (Persentage)
i-Nominal Interest Rate (Percent)
m - Number of Periods per Year (Number)
r - Effective Interest Rate (Percent)
t-Number of Years (Number)
Formulae:
Compounding Transformation (i, (m₂)→ 1₂ (m₂)): (1 + ) = (1 +)**
Perpetuity (t=00):
Ordinary Annuity (Payment at End of Period):
P=A1-(1+1)-²)
Arithmetic Gradient:
Geometric Gradient:
Capitalized Cost:
n = mt
Annuity Due (Payment at Beginning of Period):
r=-
m
F = P(1+r)"
P = F(1+r)-R
F=A
F=A
= A ((1+r)^²-1)
F=
P=A (1-(1+r)^)(1+r)
= A (¹ + r)² - 1) (1 + r)
T
FA[(1+r)-1]G[-nr + (1+r)" - 1]
T
r2
A[(1+r)"-(1+g)"]
T-9
Re-Sy
Cc=Fc++ (1+r)"-1
A = Cer
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