Question

Upon learning that Converge ICT will have an IPO (Initial Public Offering), you immediately invested P100,000 upon learning that ICT will give 25% interest compounded annually. Three years later, you borrow P50,000 from your cooperative at an annual interest rate of 20% and invested it immediately in Converge ICT. Two years later, you sold enough Converge ICT stocks to settle your loan and all interest due it. Then three years after paying the cooperative, you start selling P20,000 worth of stocks every year for five years. On the fifth year you also sold the remaining stocks you have left. For how much did you sell it for?

Answer 1

100000 @ 25 % compound interest -

25000

25000 6250

25000 6250 1562.5

Summing it up together I get 189062.5

Now cooperative bank -

50000@20%

10000

10000 2000

summing up together it is 22000

150000*25/16 = 234375

Total share after 5 th year = 189062.5+234.347

= 423409.5

Substract -72000

351409.5

Share for next 3 years 351409.5*(5/4)*(5/4) * (5/4 )

= 636346.68 Share

He sold 20000 for 5 years = 666346*1.25

8329320.975 -20000

8309320975*1.25

10386651.21 - 20000

10366651.21

now 10366651.21* 1.25 = 12958313.75

-20000

12938313.75*1.25

= 16174142.18 -20000

= 16154142.18* 1.25

= 20192677.725-20000

= 20172677.7 P