Problem 6.25

1
Problem 6.25

• Annual payroll 120,000,000
• Monthly 120,000,000 / 12 10,000,000
• Bi-weekly payroll 10,000,000 / 2 5,000,000
• Deferred payment 5,000,000
• Deferral period 1/24 or 2/52
• Interest rate 9 0.09

2
Each Month Length of Deferral Deferral Amount Interest At 9 Annual interest
1st bi-weekly 2/52 5,000,000 17,308
2nd bi-weekly 0/52 5,000,000 0
Total 17,308 207,696
1/24 5,000,000 18,750 225,000