Determine the amount must be deposited each year by Company S.

Question

On April 12, 2019, BOBOT Company adopted a plan to accumulate P5,000,000 by July 1, 2023. BOBOT plans to make four equal annual deposits to a fund that will earn interest at 10% compounded annually. BOBOT made the first deposit on July 1, 2019. Future value factors are as follows: Future value of 1 at 10% for 4 periods 1.46 Future amount of ordinary annuity of 1 at 10% for 4 periods 4.64 Future amount of annuity in advance of 1 at 10% for 4 periods 5.11 How much annual deposit should BOBOT Company make for four years in order to accumulate the desired amount on July 1, 2023 (rounded)? a. P730,000 b. P978,500 c. P1,250,000 d. P1,077,500

Answer 1

Question

Chapter M, Problem 5P

To determine

Determine the amount must be deposited each year by Company S.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

On April 12, 2019, BOBOT Company adopted a plan to accumulate P5,000,000 by July 1, 2023. BOBOT plans to make four equal annual deposits to a fund that will earn interest at 10% compounded annually. BOBOT made the first deposit on July 1, 2019. Future value factors are as follows: Future value of 1 at 10% for 4 periods 1.46 Future amount of ordinary annuity of 1 at 10% for 4 periods 4.64 Future amount of annuity in advance of 1 at 10% for 4 periods 5.11 How much annual deposit should BOBOT Company make for four years in order to accumulate the desired amount on July 1, 2023 (rounded)? a. P730,000 b. P978,500 c. P1,250,000 d. P1,077,500

What is the interest income for 2021? National Bank granted a loan to a borrower on January 1, 2021. The interest on the loan is 10% payable annually starting December 31, 2021. The loan matures in three years on December 31, 2023. Principal amount Origination fee charged against the borrower Direct origination cost incurred 4,000,000 342, 100 150,000 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. a. 400,000 O b. 380,900 c. 456,948 O d. 480,000

Nasty Bank granted a loan to a borrower on January 1,2020. The interest on the loan is 10% payable annually starting December 31, 2020 The loan matures in three years on December 31, 2022 Principal amount 4,000,000 Direct origination cost incurred 150,000 Origination fee charged against the borrower 342,100 After considering the origination fee charged against the borrower and the direct origination cost incurred, the effective rate on the loan is 12%. Required: Prepare journal entries for 2020, 2021 and 2022.