Today, you invest P100,000 into a fund that pays 28% interest compounded annually. Three years later, take a P50,000 loan from a bank at 20% annual interest and invest it in the fund. Two years later, you withdraw enough money from the fund to repay your loan from the bank and all interest due on it. Three years from this withdrawal you start taking P20,000 per year out of the fund.
Today, you invest P100,000 into a fund that pays 28% interest compounded annually. Three years later, take a P50,000 loan from a bank at 20% annual interest and invest it in the fund. Two years later, you withdraw enough money from the fund to repay your loan from the bank and all interest due on it. Three years from this withdrawal you start taking P20,000 per year out of the fund.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Today, you invest P100,000 into a fund that pays 28% interest compounded annually. Three years
later, take a P50,000 loan from a bank at 20% annual interest and invest it in the fund. Two years
later, you withdraw enough money from the fund to repay your loan from the bank and all interest
due on it. Three years from this withdrawal you start taking P20,000 per year out of the fund.
Note: Solve and alos draw its cash flow.
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