14. Find the principal value of perpetuityamount of P18,000 with a nominal rate or5% compounded quarterly15. Gihanne wants to invent P55,555.00 in amutual fund that grows continuously with9% interest rate per annum. What will be thevalue of the money after 25 years?

Perpetuity: Perpetuity is the series of fixed payments which is incurred or received for the…

Answered: 14. Find the principal value of…

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14. Find the principal value of perpetuity amount of P18,000 with a nominal rate or 5% compounded quarterly

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

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

14. Find the principal value of perpetuity
amount of P18,000 with a nominal rate or
5% compounded quarterly
15. Gihanne wants to invent P55,555.00 in a
mutual fund that grows continuously with
9% interest rate per annum. What will be the
value of the money after 25 years?

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