Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate this amount, he will make equal year and deposits in a fund earning 15% compounded annually. However, at the end of the 7th year, he decided to turn it into an agricultural farm and is planning to buy seeds and other things worth P2M. What should be his deposits in the last 3 years?
Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate this amount, he will make equal year and deposits in a fund earning 15% compounded annually. However, at the end of the 7th year, he decided to turn it into an agricultural farm and is planning to buy seeds and other things worth P2M. What should be his deposits in the last 3 years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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SUBJECT:
(a) Identify the Given and the Unknown or what is being asked in the problem
(b)Provide the formula to be used
(c)Show the complete solution. The final answer is already provided.
Ricardo plans to own a 1 hectare lot after 10 years for an estimated cost of P5M. To accumulate this amount, he will make equal year and deposits in a fund earning 15% compounded annually. However, at the end of the 7th year, he decided to turn it into an agricultural farm and is planning to buy seeds and other things worth P2M. What should be his deposits in the last 3 years?
Answer: A = P822,214.23
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