Engineering Board Exam Reviewer · Annuity Due and Deferred Annuity · hard
A man deposits P5,000 at the beginning of each year for 10 years at 8% interest and leaves the accumulated amount untouched for 5 more years. Find the amount at the end of year 15.
- P106,427.56
- P114,941.77
- P78,227.44
- P135,760.57
Answer
B. P114,941.77
Solution
The accumulation at the end of year 10 for an annuity due is 5,000(F/A,8%,10)(1.08)=5,000(14.4866)(1.08)=P78,227.44. Growing 5 more years: 78,227.44(1.08)5=P114,941.77.
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