A man invests 10,000 pesos now for the college education of his 2 year old son....
A man invests 10,000 pesos now for the college education of his 2 year old son. If the fund earns 14% effective how much will the son get each year starting from his 18th to the 22nd birthday?
Homework Answers
| Year | cash flow | pvif @ 14% | pv f cash inflow |
| 18 | x | 0.1229 | 0.1229X |
| 19 | x | 0.1078 | 0.1078X |
| 20 | x | 0.0946 | 0.0946X |
| 21 | x | 0.0829 | 0.0829X |
| 22 | x | 0.0728 | 0.0728X |
| Total | 0.04809X |
Amount of cash inflow = 100000 / 0.04809 = $207916 is the amount
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