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Mitchellou wanted to buy a motorcycle for her boyfriend after 5 years. Based on her estimates, the cost of a brand new motorcycle by
Mitchellou wanted to buy a motorcycle for her boyfriend after 5 years. Based on her estimates, the cost of a brand new motorcycle by that time is around 175,000 in cash price. If she invests her savings of 100,000 in a bank with 7% interest rate, will she be able to pay for the motorcycle after 5 years? Explain your answer. SET B: As a gift for her birthday, the parent of Jayme let her choose between the following: a.) P25,000 to be given today; Or b.) P3,000 monthly for the whole year (12 months), starting next month. If the prevailing interest rate in the market is 7% monthly, what should Jayme choose between the two? Explain your answer.
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