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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.

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Answer #1
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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