You were scheduled to receive PHP 10,000 annually starting this year. It will increase by PHP 5,000 each year and you will be receiving such amounts for 6 years. If the interest rate is 10% compounded annually, determine the present value of the cash flow. Use the editor to format your answer

You were scheduled to receive PHP 10,000 annually starting this year. It will increase by PHP 5,000 each year and you will be receiving such amounts for 6 years. If the interest rate is 10% compounded annually, determine the present value of the cash flow. Use the editor to format your answer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: What payment is required at the beginning of each month for 5 years to repay a loan of $25 000.00 at…

A: Compounding refers to the process of charging interest on the principal amount as well as on the…

Q: An investment of 42,500 Pesos was made today at 5% compounded quarterly for 5 years. After the said…

A: Here we need to find the first 5years future worth of the investment and then the final amount is…

Q: You will deposit 11.922 at 10% compound interest for 6 years, and then move the amount you would…

A: Let's divide this question into two continuous plans 1st plan with a 10% compound interest rate, 2nd…

Q: a 6410

A: Answer R = 6%

Q: Mr. Cruz plans to deposit for the education of his 5 year old son, Php 5,000 at the end of each…

A: This are the breakdown:Identify the variables:Monthly deposit (PMT) = Php 5,000Number of months (n)…

Q: Kathy is withdrawing $125,409 from an account in which she invested 8 years ago. If the account paid…

Q: Consider a geometric series of cash flows that begins at time 12 with a cash flow of $10,000. Cash…

A: Given Geometric series cash flow begins at time 12 and with a cash flow of $10,000 and there are 11…

Q: How much money should be deposited annually in a bank account for five years if you wish to withdraw…

A: An interest rate in economics is the cost of borrowing or the return on investment, expressed as a…

Q: Please show work

A: According to the question, an investment of $2,000 has made for 20 years at 8% per year. The amount…

Q: What is the accumulate value of a payment of P12,500.00 at the end of each year for 9 years with…

A: Future Value is defined as the value of a current asset at given point of time in the future. Future…

Q: You are planning to withdraw $100 in Year 1, $150 in Year 3, and $200 in Year 5. At a 5% interest…

A: In economics, the present value(PV) is the value of an anticipated stream of income determined as of…

Q: Lin is wants to earn an amount of $31350. She heard that ABC Bank is accepting investments to be…

A: Interest rate = 3.7% Present value of amount that Lin has = $4214 Future value = $31350

Q: Leon and Heidi decided to invest $2,500 annually for only the first seven years of their marriage.…

A: Present value is the value of investment in today's dollar.Future value is the value of investment…

Q: If P10,000 is deposited each year for 9 years, how much annuity can a person get semi-annually from…

A: Compound interest, also known as Interest on Interest, is interest that is added to the interest…

Q: Harry planned to buy a mountain bike. In order to do that, he saved RM100 in his piggy bank at end…

A: Here the saved amount is done in each month and is growing with specific percentage of initial…

Q: The Stafford plan now offers student loans at 4% annual interest. After two years the interest rate…

A: Initial interest rate is = 4% (to students)Increase in interest rate is =6%(after two years)Initial…

Q: Supposed you borrowed some money from a friend two hundred and seventy-five days ago at a simple…

A: n = 275 Interest = 12% Amount = 25,000 Assuming total days in years = 365

Q: If P10,000 is deposited each year for 9 years, how much annuity can a person get semi-annually from…

A: In this question:- P10,000 is deposited each year time=9 years Cost of money is 14% compounded…

Q: A recent government study reported that a college degree is worth an extra Php 35947 per quarter…

A: Given , Extra Income quarterly = 35947 Interest rate = 6% Quarterly interest rate = 6%/4 = 1.5%…

Q: You borrowed ₱85,000 from your friend that you will pay back in 4 years and 4 months. Interest is…

A: Given: Amount borrowed = P85000 Interest rate = 10% compounded quarterly.

Q: How much loan will be extinguished for a monthly amortization of ₱4,500 at 12% interest compounded…

A: Formula to be used: Compound interest (PN)=PO1+rKNKPN=Balance after n yearsN=YearsPO=Principal…

Q: What is the present value of a perpetuity of 15, 000p payable every end of 3 months if money is…

A: Perpetuity Amount = 15000 Payable at the end of every month Interest rate (i) = 8% compounding…

Q: In order to make CDs look more attractive than they really are, some banks advertise that their…

A: Simple vs Compound InterestWhen money is deposited into an account at a simple interest rate,…

Q: The Stafford plan now offers student loans at 4% annual interest. After two years the interest rate…

A: Initial interest rate of loans is 4% per annum.Increase in interest rate of loan is 7% per annum.…

Q: A man wishes to bequeath to his daughter P500k twenty yrs from now. What amount should he invest now…

A: SOLUTION AMOUNT-500K (500000) Rate - 18% For first 5 yr rate- 16 % next 15 yr principle -?we need…

Q: A bussinessman borrowed money to be paid in equal payments of php 490.00 at the end of every period…

A: In economics, present value refers to the current value of a future stream of cash flow. Future…

Q: Every year you deposit $2,600 into an account that earns 2% interest per year. What will be the…

A: here we calculate the balance after 40th deposit by calculating the future value , so the…

Q: o coupon bond will be worth $11,000 when it matures and is redeemed after 11 years. How much would…

Q: What is the interest rate that would make $10,000 received in the first year equivalent to $3,500…

A: The objective of this question is to find the interest rate that would make a lump sum of $10,000…

Q: Mr Chen wants to get a lumpsum of 3.5 million pesos when he retires at the end of 20 years. How much…

A: Given, Amount- 3.5 m or 3500000 Time- 20 years Interest 12%

Q: A man bought an equipment costing P125,000 payable in 12 quarterly payments. Each installment is…

A: Given: Cost of equipment=P125000 Number of quarterly payment=12 Rate of interest=14% To find: Amount…

Q: If I invest PhP 100,000 today and expect a reimbursement at the end of every 6 months with an…

A: Given: Number of payments (n) = 2 semi-annually * 3 years = 6Interest rate (i) = 7.5%/2 =…

Q: A man wishes his son to receive P250,000 ten years from now. What amount should he invest if it will…

A: The present worth technique is very famous in industry since every single future expense and incomes…

Q: The Stafford plan now offers student loans at 4% annual interest. After two years the interest rate…

A: The cash flow diagram of the given problem can be represented as The amount owed at the end of 4…

Q: Leon and Heidi decided to invest $2,500 annually for only the first seven years of their marriage.…

A: A sum's present value (PV) is its future value (FV), which is determined by how many periods of…

Q: You borrowed money today to be paid in 8 equal payments at the end of 8 quarters. If the interest…

A: In the financial world, "principal" is a term that can mean various things. When referring to a loan…

Q: Suppose you deposit $1,000 in a bank savings account that pays interest at a rate of 8% per year.…

A: A savings plan usually pays a moderate interest rate, making them a better choice for saving money…

Q: If the sum of ¥15,000 is deposited in an account earning interest at the rate of 12% compounded…

A: Given information, Principal amount (P): ¥15,000 Interest rate (r): 12% Compounding period (m): 2…

Q: What equal amount (Q) must be deposited at the beginning of each year for the next 5 year s in a…

A: The financial product paying out a fixed payment stream to individuals being used as a stream of…

Q: Suppose that an investor wishes to deposit an amount now so that in 30 years S1,000,000 will be in…

A: An investor wishes to deposit an amount now so that in 30 years $1,000,000 will be in an account…

Q: should be deposited annually in t for five years if you wish to withdraw $4,500 each year Click the…

A: To determine the annual contribution, you want to realize the yearly interest price and what number…

Question

You were scheduled to receive PHP 10,000 annually starting this year. It will increase by PHP 5,000 each year and you will be
receiving such amounts for 6 years. If the interest rate is 10% compounded annually, determine the present value of the cash flow.
Use the editor to format your answer

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A geometric gradient that increases at f= 5% per year for 15 years is shown in the accompanying diagram. The annual interest rate is 10%. What is the present equivalent value of this gradient? AClick the icon to view the diagram for geometric gradient values. Click the icon to view the interest and annuity table for discrete compounding when i= 5 % per year. Click the icon to view the interest and annuity table for discrete compounding when i= 10% per year. 4... The present equivalent value of the gradient is $ (Round to the nearest dollar.)
To have his own pad, James decided to deposit Php20,000 at the end of each month in a bank paying 7% compounded monthly. How much would he expect to have in three years?
K How much money should be deposited annually in a bank account for five years if you wish to withdraw $6,000 each year for three years, beginning five years after the last deposit? The interest rate is 2% per year. Click the icon to view the interest and annuity table for discrete compounding when i=2% per year. The annual deposit amount should equal $ per year. (Round to the nearest dollar.)
Ellen borrowed P100,000 from a local bank at 10% annually. She must pay back the loan in five years with uniform payments due on the first day of each month. How much is her monthly payment? Please also show the cash flow diagram. Thank you very much
If I loaned P165,796 today and promised to pay it back after 5 years to the bank with monthly payments that starts also by the time I received my loaned amount with an interest rate of 10.46% compounded monthly. What is the monthly amount I must set aside to pay for this loan?
A recent government study reported that a college degree is worth an extra Php 35947 per quarter income compare to high school graduate. If the interest is 6 % per year compounded quarterly and you work for 31 years, what is the future compound amount of this extra income? Round your answer to 2 decimal places.including cash flow diagram
The Lahiri family rents a room in their home on Airbnb. They deposit all of the money that they earn into a vacation fund that earns 7% that i are shown below. Year Revenue $1,200 $850 3 $1,300 4 $1,800 $800 In year six, they did not rent their room due to extensive remodeling. How much would be in the account at the end of year 6?
How much money would you have to deposit for 5 years consecutive years starting one year from now if you want to be able to withdraw P 100,000 eight years from now? Assume that the interest is 12% compounded annually
Jack Townsend is a soda pop “addict” and wonders how much money he could accumulate if he stopped drinking soda pop and deposited the $90 per month he spends on the stuff into a savings plan. If Jack is 20 years old, what amount should he have at retirement, 50 years from now, if he deposited $90 at the end of each month and his savings plan earned 6.75% compounded monthly?
Compare the interest earned by $10,000 for three years at 9% simple interest with interest earned by the same amount for three years at 9% compounded annually. Why does a difference occur? Click the icon to view the interest and annuity table for discrete compounding when i=9% per year. The simple interest earned is (Round to the nearest dollar.) (Round to the nearest dollar.) The compound interest earned is $ There is a difference in the amount of interest earned because compound interest allows interest from previous years to earn additional interest, whereas simple interest only considers the original principal.
Susie Jones is a soda pop “addict” and wonders how much money she could accumulate if she stopped drinking soda pop and deposited the $100 per month she spends on the stuff into a savings plan. If Susie is 18 years old, what amount should she have at retirement, 52 years from now, if she deposited $100 at the end of each month and her savings plan earned 6.75% compounded monthly?
Try to solve in 30 minute A loan of $17,300 at 8.3% compounded annually is to be paid off by equal payments to be made at the end of every year for 5 years. What is the size of the annual payment