question archive You expect to receive P1,000 at the END of each of the next 3 years
You expect to receive P1,000 at the END of each of the next 3 years
Subject:FinancePrice:3.87 Bought7
You expect to receive P1,000 at the END of each of the next 3 years. You will deposit these payments into an account which pays 10 percent, compounded semiannually. What is the future value of these payments, that is, the value at the end of the third year?
a. P1,157.63
b. P1,340.10
c. P1,331.00
d. P3,318.01
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Answer : d. P3,318.01
Step-by-step explanation
| Period | Payment | Interest | Accumulated Amount |
| (Previous Amount x 10% / 2) | (Previous Amount + Payment + Interest) | ||
| End of 1st Year | 1000 | 1,000.00 | |
| 2nd Year - 1st Semester | 50.00 | 1,050.00 | |
| 2nd Year - 2nd Semester | 1000 | 52.50 | 2,102.50 |
| 3rd Year - 1st Semester | 105.13 | 2,207.63 | |
| 3rd Year - 2nd Semester | 1000 | 110.38 | 3,318.01 |
