On his 40th birthday, Mr. Ramos decided to buy a pension plan for himself. This plan will allow him to claim P10,000 quarterly for 5 years starting 3 months after his 60th birthday. What one-time payment should he make on his 40th birthday to pay off this pension plan, if the interest rate is 8% compounded quarterly?

A. P163,514.33

B. P33,538.38

C. P430,983.52

D. P397,445.14

See Answer

Add Answer +20 Points

Community Answer

See all the answers with 1 Unlock

Get 4 Free Unlocks by registration

Get 4 Free Unlocks by registration

Step 1Payment = P10,000Rate = 8% Compounding = 4 times as payment is due in 3 months The annuity is deferred for 20 years and it will go for 5 years After his 60th birthday at end of the 81st conversion period  Step 2Number of artifical payments = time period ×Compounding                                              = 20×4                                             = 80Interest rate per period = RateCompounding = 8%4=2%Number of actual payments = Time period ×Compounding                   ... See the full answer