1. You deposited PHP1, 500 in a bank with an interest rate of 5% for 1 year. What is thefuture value of your deposit?2. FNB pays 6% interest compounded semi-annually. SNB pays 6% compounded monthly.Which bank offers the higher effective annual rate?3. You deposit PHP1, 000 in your bank account. If the bank pays 4% simple interest, howmuch interest will you accumulate in your account after 10 years?.a. What if the bank pays compound interest?4. Mr. Sotto won PHP10 million in the lottery. He was very excited to collect his winningsand had several plans for his PHP10 million. He would buy his dream house, car, and alot more. However, he was very disappointed when the officers from PCSO said that hewill not get his PHP10 million pesos upfront. He, however, has the following options:Get 8.1 million upfrontReceive 1 million every year for 10 yearsReceive 1.8 million every year for 5 yearsa. The current government bonds have a yield of 5% per annum. Which is the bestoption?BPOCES OF

Future Value: The future value is the amount that will be received at the end of a certain period.…

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You deposited PHP1, 500 in a bank with an interest rate of 5% for 1 year. What is the future value of your deposit?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Question

1. You deposited PHP1, 500 in a bank with an interest rate of 5% for 1 year. What is the
future value of your deposit?
2. FNB pays 6% interest compounded semi-annually. SNB pays 6% compounded monthly.
Which bank offers the higher effective annual rate?
3. You deposit PHP1, 000 in your bank account. If the bank pays 4% simple interest, how
much interest will you accumulate in your account after 10 years?.
a. What if the bank pays compound interest?
4. Mr. Sotto won PHP10 million in the lottery. He was very excited to collect his winnings
and had several plans for his PHP10 million. He would buy his dream house, car, and a
lot more. However, he was very disappointed when the officers from PCSO said that he
will not get his PHP10 million pesos upfront. He, however, has the following options:
Get 8.1 million upfront
Receive 1 million every year for 10 years
Receive 1.8 million every year for 5 years
a. The current government bonds have a yield of 5% per annum. Which is the best
option?
BPOCES OF

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