Investment in Sunrise Company is ₱ 100,000 at the end of 5 years plus ₱ 24,000 annually for 4 years afterwards. Investment in XYZ company offers ₱ 50,000 semi-annually ₱ 15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annually, which investment is preferable?
Answers & Comments
Answer:
XYG's Company
Step-by-step explanation:
Sunrise Company:
100,000 x 5 = 500,000
24,000 x 4 =96,000
500,000 + 96,000 = 596,000
9% of 596,000 is 53,640 x 6= 321,840
596,000 +321,840 = 917, 840
therefore sunrise company investment
after 6 years is Php 917,840
XYZ Company:
50,000 x 2= 100,000
15,000 x 2= 30,000
130,000 x 6 = 780,000
9% of 780,000 is 70,200 x 6= 421,200
780,000 + 421,200 = 1,201,200
therefore the xyz company's investment
after six years is Php 1,201,200