Mr Dela Cruz deposited ₱18,980.00 from the project you’ve earned in a time deposit account with your savings bank at a rate of 1.25 per annum. This will mature in mature in two years. Compute for the interest and the total amount to be collected?

Mr Dela Cruz deposited ₱18,980.00 from the project you’ve earned in a time deposit account with your savings bank at a rate of 1.25 per annum. This will mature in mature in two years. Compute for the interest and the total amount to be collected?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 1E

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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