Question

15. Find the amount of the following payments at the end of 5th year. P3000 at the end of 1st yr, P45000 at the end of 2nd year and p6000 at the end of 4th year, if money worth 12% per annum.

Answer 1

The correct answers is: P42,365.45

Workings

The question can be solved using simple mathematical formula

Using formula, Amount = Principal / (1+Interest Rate)^No. of years

At end of year 5

P3000 will become = 3000/(1+12%)^1 = 3000/1.12 = P2,678.57

P45000 will become = 45000/(1+12%)^2 = 45000/1.2544 = P35,873.72

P6000 will become = 6000/(1+12%)^4 = 6000/1.5735 = P3,813.16

Adding the above amounts, Total amount at the end of year 5 = P42,365.45

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