On January 1, 2014, Mr. Albuera invested P2,000,000 in the six-year time deposit of Sulu Unibank which pays 10% annual interest. Assume Mr. Albuera pre-terminated the time deposit on July 1, 2018. Compute the final tax to be withheld on pre-termination. P5,000 P12,000 P45,000 P108,000

On January 1, 2014, Mr. Albuera invested P2,000,000 in the six-year time deposit of Sulu Unibank which pays 10% annual interest. Assume Mr. Albuera pre-terminated the time deposit on July 1, 2018. Compute the final tax to be withheld on pre-termination. P5,000 P12,000 P45,000 P108,000

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 21CE

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

On January 1, 2014, Mr. Albuera invested P2,000,000 in the six-year time deposit of Sulu Unibank which pays 10% annual interest.

Assume Mr. Albuera pre-terminated the time deposit on July 1, 2018. Compute the final tax to be withheld on pre-termination.

P5,000

P12,000

P45,000

P108,000

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