Topic: Ordinary annuityUse these Formula: Present Value: P=C [1-(1+i)^-n/i]Future Value: F=C [(1+i)^n -1/i)]Please use manual solving, final answer is already in the picture. 7.) John borrowed P4500 cash from his friend. His friend's condition is that hemust pay his debt in 2 years with an interest of 3% one time payment only.However, john plans to set aside an amount of money in his piggy bank every3months with an interest of 4% compounded quarterly until he canaccumulate the total debt and pay it one time to his friend. How much moneymust John set aside every 3months? ANSWER: A = P559.3995

Present Value: It is the present worth of the future stream of annual cash flows. The present value…

Answered: accumulate the total debt and pay it…

accumulate the total debt and pay it one time to his friend. How much money must John set aside every 3months? ANSWER: A = P559.3995

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 28P: Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local...

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Question

Topic: Ordinary annuity Use these Formula: Present Value: P=C [1-(1+i)^-n/i] Future Value: F=C [(1+i)^n -1/i)] Please use manual solving, final answer is already in the picture.

7.) John borrowed P4500 cash from his friend. His friend's condition is that he
must pay his debt in 2 years with an interest of 3% one time payment only.
However, john plans to set aside an amount of money in his piggy bank every
3months with an interest of 4% compounded quarterly until he can
accumulate the total debt and pay it one time to his friend. How much money
must John set aside every 3months? ANSWER: A = P559.3995

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