Engineering Board Exam Reviewer · Ordinary Annuity · medium
Payments of P10,000 are made at the end of each quarter for 5 years. Find the present worth at 10% compounded semiannually.
- P155,891.62
- P124,622.10
- P156,341.59
- P77,217.35
Answer
C. P156,341.59
Solution
The payment period is a quarter but interest is compounded semiannually. The effective rate per quarter is i=(1.05)1/2-1=2.47%. PW=10,000(P/A,i,20)=P156,341.59.
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