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The values are in Philippine Peso. 1. BDO pays 9 percent simple interest on its savings account balances whereas I Security Bank pays 9 percent
The values are in Philippine Peso.
1. BDO pays 9 percent simple interest on its savings account balances whereas" I Security Bank pays 9 percent interest compounded annually. if you made a P5 .000 deposit' In each bank, how much more money would you earn from Security Bank at the end of 10 years? 2 Compute the future value of P1 000 (impounded annually for a. 10 years at 6 percent b. 10 years at 9 percent ' c2 20 years at 6 percent - d. Why is the interest earned in part (c) not twice the amount earned in part (a)? 3' Although appealing to more rened taste art as a collectible has not always performed to so profitably. However, an office skyscraper in Fort Bonifacio two years ago was able to sell a collector' s sculpture at auction for a price of P10, 311 50.0 Unfortunately for the previous owner, he had purchased it ve years ago at a price of 912,377.500. What was his annual rate of return on this sculpture? 4. An investor purchasing a perpetuity is entitled to receive annual payment forever. - What is the price of a perpetuity that pays P120 annually if the next payment occurs one year from today? The market interest rate is 5.7 percent. 5.' Joiiytee, inc. has identified an investment project with the following cash ows. if the discount rate is 10 percent. what is the present value of these cash ows? What is the present value at 18 percent? At 24 percent? Year Cash Flow 1 P1 .200 . 2 730 3 965 4 P1590 6. Explain what is meant by the \"time value" of money. 7. What is the purpose of the discount calculationStep by Step Solution
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