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Homework answers / question archive / To secure a perpetual quarterly income, a man invests 500,000 pesos at 8

To secure a perpetual quarterly income, a man invests 500,000 pesos at 8

Finance

To secure a perpetual quarterly income, a man invests 500,000 pesos at 8.5% compounded quarterly. Find the quarterly income.

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We can calculate the quarterly income by using the following formula in excel:-

=pmt(rate,nper,-pv,fv)

Here,

Pmt = Quarterly income

Rate = 8.5%/4 = 2.125% (quarterly)

Nper = 4 periods (quarterly)

PV = 500,000

FV = 0

Substituting the values in formula:

= pmt(2.125%,4,-500000,0)

= 131,710.43 pesos

 

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