Mr. Dela Cruz plans to deposit a 1,000 pesos at the end of each month for...
Mr. Dela Cruz plans to deposit a 1,000 pesos at the end of each month for 5 years at 12% interest compounded bi-monthly. What will be the amount available in three years. Use ordinary annuity.
Homework Answers
| Table or Calculator Function: | FVAD of $1 | |||
| Payment: | 1000 Pesos | |||
| n = | 6 | |||
| i = | 6.0% | |||
| Future Value | 6,975 Pesos | |||
| The value for Future Value of Annuity for 6% at 6 period is 6.97532 | ||||
| Since the payment is bi-monthly it means that in 1Year 2 payments will be made in interval of 6 months and we have to find the Future value at end of 3 Years | ||||
| That is why, | ||||
| time(n) =3 Years *2 =6 paymens | ||||
| Periodic interest rate(i) =12%*6/12 =6% | ||||
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