A man is left with an inheritance from his father. He has an option to receive P2M at the end of 10 years, however he wishes to receive the money at the end of each year for 5 years. If interest rate is 8%, how much would he receive every year? a. 352,533.00 b.200,000.00 c. 400,000.00 d.232,020.00

A man is left with an inheritance from his father. He has an option to receive P2M at the end of 10 years, however he wishes to receive the money at the end of each year for 5 years. If interest rate is 8%, how much would he receive every year? a. 352,533.00 b.200,000.00 c. 400,000.00 d.232,020.00

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

A man is left with an inheritance from his father. He has an option to receive P2M at the end of 10 years, however he
wishes to receive the money at the end of each year for 5 years. If interest rate is 8%, how much would he receive every
year?
a. 352,533.00
b.200,000.00
c. 400,000.00
d.232,020.00

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