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How to solve number 2? (for Annuities):

 

 

1. Elena deposited P10,000 in Banco de Plata at the end of each year for 10 years. The bank paid interest at the rate of 4% compounded yearly. How much did she have on deposit after her tenth deposit? 

 

2. Continuing from number 1, what is the present value of her deposits from the first deposit to her deposit at the end of the 5th year?

 Sep 20, 2020
 #1
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1 - P=10000;   R=0.04;  N=10;    FV=P*((1 + R)^N - 1)/ R

FV = $ 120,061.07

 

2 - PV=0; P=10000; R=0.04; N=5;    P*(((1 + R)^N - 1)*((1 + R)^-N)* R^-1)

PV = $44,518.22

 Sep 20, 2020
 #2
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Thanks

Griel  Sep 21, 2020

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