Q2. Deposits are to be made to an account as indicated in the table below which bears interest at the rate of 10% compounded annually. How much will there be in the account at the end of the sixth year? END OF YEAR DEPOSIT 1 500 3 1000 4 1500 2000 Answer: F6 = 6,078.05Php

Q2. Deposits are to be made to an account as indicated in the table below which bears interest at the rate of 10% compounded annually. How much will there be in the account at the end of the sixth year? END OF YEAR DEPOSIT 1 500 3 1000 4 1500 2000 Answer: F6 = 6,078.05Php

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

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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.

Question

Q2. Deposits are to be made to an account as indicated in the table below which bears interest at the
rate of 10% compounded annually. How much will there be in the account at the end of the sixth year?
END OF YEAR
DEPOSIT
1
2
500
3
1000
4
1500
2000
Answer: F6 = 6,078.05Php
%3D

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