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TVM Assignment
TVM Assignment
TVM Assignment
(b) What is the present value of P7,000 due 8 periods hence, discounted at 6%?
What is the future value of 15 periodic payments of P7,000 each made at the end
(c) of each period and compounded at 10%?
What is the present value of P7,000 to be received at the end of each of 20
(d) periods, discounted at 5% compound interest?
Dwayne Wade Company recently signed a lease for a new office building, for a
lease period of 10 years. Under the lease agreement, a security deposit of
P12,000 is made, with the deposit to be returned at the expiration of the lease,
with interest compounded at 5% per year. What amount will the company receive
(a) at the time the lease expires?
Sevena Wiliams Corporation, having recently issued a P20 million, 15-year bond
issue, is committed to make annual sinking fund deposits of P600,000. The
deposits are made on the last day of each year and yield a return of 10%. Will the
fund at the end of 15 years be sufficient to retire the bonds? If not, what will the
(b) deficiency be?
Under the terms of his salary agreement, president Rex Walters has an option of
receiving either an immediate bonus of P55,000, or a deferred bonus of P70,000
payable in 10 years. Ignoring tax considerations and assuming a relevant interest
(c) rate of 4%, which form of settlement should Walters accepts?
Prob 5 Computation of a Retirement Fund
Clarence Weatherspoon, a super salesman contemplating retirement on his
fifty-fith birthday, decides to create a fund on a 8% basis that will enable him to
withdraw P20,000 per year on June 30, beginning in 2021 and continuing through
2024. To develop this fund, Clarence intends to make equal conttribution on June 30
of each of the years 2017-2020.
Instruction:
(a) How much must the balance of the fund equal on June 30, 2020, in order for
Clarence to satisfy his objective?
(b) What are each of Clarence's contribution to the fund?