ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years? 2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years? 3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years? Note: Please use the formula below.
ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years? 2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years? 3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years? Note: Please use the formula below.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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1. ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years?
2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years?
3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years?
Note: Please use the formula below.
Transcribed Image Text:Future Value of Money
Time Value of Money Formula
(n xt)
Future Value
of Money
=
Present Value
of Money
PV X (1+1)
FV
(nxt)
(1 + + ) (^X²)
-
n
Transcribed Image Text:PRESENT AND FUTURE
VALUE
FUTURE VALUE
Definition: The rising value of a today's
sum at a specified future date given at a
specified rate of interest.
Formulae:
FV = PV (1+r)n
where;
PV = Present Value / Principal Amount
FV = FV of the initial principal n years
hence
R= Rate of Interest Per annum
N = number of years for which the
amount has been invested.
PRESENT VALUE
▪ Definition: The today's value of a single
payment or series of payment to be
received at a later date, given at a specified
discount rate.
Formulae:
PV = FV * 1/(1+r)n
where;
PV = Present value or the principal amount
FV = FV of the initial principal n years
hence
R = Rate of Interest per annum
N = number of years for which the
amount have been invested.
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