An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate ofinterest is 4% compounded annually.1. What is the present value of this annuity at the time he is supposed to receive the firstрayment?2. What is the sum of this annuity at the end of the 18th year?3. Find the difference between the sum of this annuity which is paid at the beginning ofeach year and an annuity paid at the end of each year.Ans.1. Р329,141.722. Р666,780.733. Р25,645.41

Solution 1: Present value of annuity = P25,000 * Cumulative PV factor at 4% for 18 periods of…

An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first раyment? 2. What is the sum of this annuity at the end of the 18th year? 3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Ans. 1. Р329,141.72 2. Р666,780.73 3. P25,645.41

An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first раyment? 2. What is the sum of this annuity at the end of the 18th year? 3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Ans. 1. Р329,141.72 2. Р666,780.73 3. P25,645.41

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 12E

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