Question

3. Mr. and Mrs. Mercado decided to sell their house and to deposit the fund in a bank. After computing the interest, they found out that they may withdraw P350,000 yearly for 4 years starting at the end of 7 years when their child will be in college. How much is the fund deposited if the interest rate is 3% compounded annually? 4. A group of employees decided to invest a portion of their bonus. After 3 months from today, they want to withdraw from this fund P5,000 monthly for 12 months to fund their gathering that they decide to do every month. How much is the total deposit now if the interest rate is 5% compounded monthly? 5. Anna converted her loan to light payments which gives her an option to pay P1,500 every month for 2 years. The first payment is due 3 months from now. How much is the amount of the loan if the interest rate is 9% compounded monthly?

Answer 1

3

PVAnnuity Due = c*((1-(1+ i)^(-n))/i)*(1 + i )

C = Cash flow per period

i = interest rate

n = number of payments

PV= 350000*((1-(1+ 3/100)^-4)/(3/100))*(1+3/100)

PV = 1340013.97

Future value = present value*(1+ rate)^time

1340013.97 = Present value*(1+0.03)^7

Present value = 1089553.98

Please ask remaining parts seperately, questions are unrelated