(Solved): ANNUITIES MAKE A CASH FLOW DIAGRAM FOR EACH ITEM NOTE: Make a cash flow diagram for each item. 1. A ...

ANNUITIES

MAKE A CASH FLOW DIAGRAM FOR EACH ITEM

NOTE: Make a cash flow diagram for each item. 1. A residential building can be acquired at a down payment of \( \mathrm{P} 800,000 \) and a yearly payment of P125,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of the purchase. If money is worth \( 11.5 \% \) compounded quarterly, what is the cash price of the residential building? 2. How much money would you have to deposit for five consecutive years starting one year from now if you want to be able to withdraw \( \mathrm{P} 50,000 \) ten years from now? Assume the interest is \( 14 \% \) compounded annually. 3. A businessman inherited a regular endowment of \( P 100,000 \) every end of 3 months for " \( \mathrm{x} \) " years. However, he may choose to get a single lump sum of \( \mathrm{P} 3,702,939.80 \) at the end of 4 years. If the rate of interest was \( 14 \% \) compounded quarterly, what is the value of " \( \mathrm{x} \) "? Use ordinary annuity.