SOLVE THE FOLLOWING PROBLEM AND STATE THE FOLLOWING:

* GIVEN

* REQUIRED

* SOLUTION

* DRAW CASHFLOW DIAGRAM

1. A man borrowed P10,000.00 to a loan shark on April 1, 2002 and P2,000 on April 1, 2004 agreeing that money is worth 6% compounded annually. The man paid P4,200 on April 1, 2005, P3,800 on April 1, 2006 and P5,000 on April 1, 2007. How much should the man pay on April 1, 2010 to discharge all remaining liability? Show Cash Flow Diagram.

2. Find the capitalized cost of a project which requires P4.5 million for original construction; P120,000 at the end of every year for the first 5 years and then P150,000 each year thereafter for operating expenses and P450,000 every 5 years for replacement purposes with interest at 10% per annum. Show Cash Flow Diagram