An amount of 100,000 was borrowed and was to be repaid in 10 instalments at the end of every quarter thereafter with each payment more than $1,000 more than the preceding, if interest is 12% compounded semi-annually,(a) determine the amount of the first payment and (b) the total amount paid by the borrower. DRAW THE CASH FLOW DIAGRAM.

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Chapter1: Making Economics Decisions
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Use 4 decimals in between process and 2 decimals in final answer

 

An amount of 100,000 was borrowed and was to be repaid in 10 instalments at the end
of every quarter thereafter with each payment more than $1,000 more than the
preceding, if interest is 12% compounded semi-annually.(a) determine the amount of
the first payment and (b) the total amount paid by the borrower. DRAW THE CASH
FLOW DIAGRAM.
Transcribed Image Text:An amount of 100,000 was borrowed and was to be repaid in 10 instalments at the end of every quarter thereafter with each payment more than $1,000 more than the preceding, if interest is 12% compounded semi-annually.(a) determine the amount of the first payment and (b) the total amount paid by the borrower. DRAW THE CASH FLOW DIAGRAM.
Use 4 decimal places in between process and 2 decimal for the final answer. Show the cash
flow diagram.
1. Pedro Cruz started working for the ABC Corporation on his 25th Birthday. Each month
P30 was withheld from his salary and matched by an equal contribution from his
employer, to be kept into a retirement fund. At the end of each year the contributions
for the year were invested in a trust fund where it earned 8% interest compounded
annually. Pedro retired on his 60th birthday and elected to receive an annuity of 20
annual payments, the first to be received immediately. What was the amount of each
payment? DRAW THE CASH FLOW DIAGRAM.
Transcribed Image Text:Use 4 decimal places in between process and 2 decimal for the final answer. Show the cash flow diagram. 1. Pedro Cruz started working for the ABC Corporation on his 25th Birthday. Each month P30 was withheld from his salary and matched by an equal contribution from his employer, to be kept into a retirement fund. At the end of each year the contributions for the year were invested in a trust fund where it earned 8% interest compounded annually. Pedro retired on his 60th birthday and elected to receive an annuity of 20 annual payments, the first to be received immediately. What was the amount of each payment? DRAW THE CASH FLOW DIAGRAM.
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