Chapter3: Income Sources
Section: Chapter Questions
Problem 41P
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A time deposit has been made by a father at
₱1,000,000.00 for his daughter and she shall receive
it at the date of his death. The man started this deposit
at the 7th birthday of his daughter. He died when his
daughter is at her 20th birthday. If money is worth 4%
compounded semi-bi-quarterly, how much will her
daughter received after his death?
Ans: ₱1677688.92
B. The expansion plan of an engineering firm
requires the purchase of parcel of land on which it
will build a steam powerplant to supply the needs of
a remote community, which they will need 10 years
hence. The current cost of land is ₱1,000,000.00 and
the building is ₱5,000,000. Since these are not
needed immediately, the firm decides to defer the
purchase of the land and the construction of the plant
until they are needed. If value of land and cost of
constructing the plant appreciates at the rates of 10%
and 20% respectively, what will be the total cost of
the land and the structure six years hence?
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