How much payment is necessary

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Q1) In five years. Php 1,800,000 will be needed to pay for a building renovation. In order to generate this sum, a sinking fund of three annual payments is established now. For tax purposes, no further payments will be made after three years. How much payment is necessary if the money is worth 14% per annum? assume a 6% inflation rate.

Q2) Suppose you purchase an insurance policy in 2018 that will provide you a retirement fund of Php 2,500,000 in 2050. If the annual inflation rate is 8%, how much will be the purchasing power of the said amount in 2050?

Reference no: EM132771371

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