Solution: What is the amount he would need to deposit now?

An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year for the next 15 years. Assuming a 6% annual effective interest rate,

What is the amount he would need to deposit now?

Problem Statement: ME Board April 1998

An instructor plans to retire in exactly one year and want an account that will pay him P25,000 a year for the next 15 years. Assuming a 6% annual effective interest rate, what is the amount he would need to deposit now? (The fund will be depleted after 15 years).

  • A. P242,860.22
  • B. P242,680.22
  • C. P242,608.22
  • D. P242,806.22

Problem Answer:

The amount he would need to deposit now is P242,806.22.

Solution:

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