CHAPTER 3 LESSON 1-6

1. If the prevailing worth of money is 12% interest compounded monthly, find the present
value and amount of annuity of P2000 payable monthly for 10 years?
2. Find the present value and amount of annuity of P8796 payable monthly for 2 years at
3% effective interest rate.
3. Find the present value and amount of annuity of P13250 payable quarterly for 2 years
and 6 months at 11% compounded quarterly.
4. To create a fund for his forthcoming business venture, Matthew decides to deposit
P5000 at the end of each month to his bank account. If the bank pays 1% compounded
monthly on his deposits, how much will he have at the end of 2 years?
5. What is the amount of a four- year ordinary annuity whose present value is P100,000 if
money is worth 2.75% interest compounded monthly?
6. Mrs. Emily Chua has been paying P3395.95 monthly for 10 months for a washing
machine that she bought on installment. The interest rate is 3% converted monthly.
a. Find the amount that she has paid at the end of 10 months.
b. How much is the equivalent present value of the transaction?
7. Gloria wants to ensure that she has enough funds for her sons college education. Her
son will be in college in 6 years time. She intends to invest P5000 payable monthly to a
savings plan that earns 1.75% compounded monthly. If Gloria withdraws the amount
after 4 years and invest it to another savings plan that pays 3% simple interest rate
until her son reaches college, how much does she get for her sons college education?
8. Mrs. Myrna Mendoza, a car buyer, makes a down payment of P225,000 and pays
P20,794.52 at the end of each month for 5 years to discharge all principal and interest
costs at 36% interest rate compounded monthly. Find the equivalent cash price of the
car.
9. For her tablet computer, Francine agreed to pay P6500 at the end of each month for 6
months. If the interest is at 18% converted monthly, how much is the cash price of the
tablet computer?
10.Peppin purchased a signature bag using her credit card. She paid P4250 monthly at
effective rate of 2.75% for 3 months. Find the cash price of the bag.
11.Mr. Coronacion acquired a resort by making a P5M down payment and a sequence of
P600,000 payments made at the end of each year for 5 years. If money is worth 18%
effective rate computed annually, how much is the cash price of the resort?
12.Mrs. Enciso paid P500,000 as down payment for a piece of property in Tagaytay. The
remaining liability is to be settled by paying P50,000 at the end of each month for 3
years. If money is worth 15% compounded monthly, how much is the cash price of the
property?
13.Mr. Reyes has P500000 which he intends to invest. A franchise to sell a certain food
product is offered to him. The contract calls for a down payment of P200000 and the
balance is to be paid off by paying P45000 quarterly at an interest of 8% compounded
quarterly for 1 year and 9 months. If he decides to purchase the franchise in cash, does
he have enough funds to pay for it? If not, how much more does he need to pay the
franchise in cash?
14.At the end of each 6 months for 7 years, ABC Printing will deposit P50,000 in a
depreciation fund to provide for the replacement of its printing machinery at the end of
7 years. If the fund accumulates at 8% compounded semi-annually, how much is in it
(a) just after the last deposit and (b) just after the 5 th deposit?
15.Mrs. Marites Batino placed deposits of P5000 in a fund at the end of each month for 3
years with the agreement that the fund would earn interest of 2% for the first 2 years,
and 2 % for the last year. How much is the fund (a) at the end of 2 years and (b) at
the end of 3 years?
16.If Mark deposits P3,000 at the end of every 3 months to a bank that pays 2.5%
compounded quarterly, how much is credited to his account just after his 20 th deposit?
17.In preparation for the college education of her son, Mrs. Calara will deposit P2,400 at
the end of each month for 5 years in a fund earning 4.5% compounded monthly. How
much is in the fund (a) just after the 15 th deposit and (b) just after the last deposit?
18.Gabriel and Ritchelle plan to settle down in 2 years. They speculate that the wedding
would cost them P1 million. They decide to save P40000 at the end of each month for
the first year to an investment fun that guarantees 4% per year compounded monthly
and P50000 at the end of each month for the next year and an interest rate of 4.5%
compounded monthly how much have they saved at the end of (a) 1 year and (b) 2
years?
19.Michael bought a laptop and paid P10,000 as down payment plus P3,000 at the end of
each month for a year. If money is worth 24% converted monthly, find (a) the cash price
of the laptop,(b) Michaels remaining liability just after his 5 th installment and (c) his
remaining liability just before he pays his 7th installment.
20.Mr. Dela Cruz bought a lot and paid P500 000 cash. He intends to pay the balance by
installment and promises to pay P34 778.02 at the end of every 3 months for 20 years.
(a) Find the cash price of the lot, (b) If Mr. De La Cruz failed to pay the first 3 quarterly
payments when they were due, how much should he pay at the end of 1 year in order
to cancel his accumulated liability?
21.A flat screen TV can be purchased with payments of P12,500 at the end of each month
for 2 years. If money is worth 18% compounded monthly, find (a) the cash price; (b) the
remaining liability just after the 7th payment; (c) the remaining liability just before the
17th payment.
22.In return for a loan, Mr. Domingo promises to pay P15,000 at the end of each 3 months
for two years. If money is worth 10% converted quarterly, find (a) the principal
borrowed; (b) his remaining liability just before his 3 rd payment; (c) his remaining
liability just after the 5th payment.
23.Mrs. Anonas acquired a loan of P50,000 from a credit union that charged an interest of
16% compounded quarterly. She promised to settle her obligation by making quarterly
payments for 3 years. Find her quarterly payment.
24.To create a fund for the purchase of a brand new car, Frances will make equal monthly
deposits to a bank that pays [4%, m = 12] for 5 years. If she intends to buy a car that
will cost her P700,000, how much should she deposit monthly to the bank.
25.Mrs. Cristina Joaquin borrows P50,000 and agrees to discharge her liability as to
principal and interest by paying equal sums at the end of each 6 months for 8 years. If
money is worth 6 % compounded semi-annually, how much is her semi-annual
payment?
26.At the end of each year for 10 years, LMN Corporation will deposit equal sums to a
depreciation fund to provide for the replacement of its machinery worth P500,000. If the
fund accumulates at 2% effective rate, how much must the corporation deposit?
27.Mrs. Gina Joaquin needs a fund of P900,000 to expand her house. To provide for this,
she will place P10,000 at the end of each month in an investment that pays [16%, m =
12]. (a) When will the fund accumulate to at least P900,000? (b) How many full
investments of P10,000 are required? (c) How much must be added to the accumulated
investment on the last month to complete the P900,000 needed for the expansion of
the house? (d) How much must be added to the last regular deposit of P10,000 to
complete the P900,000 on that date?
28.How long willit take to discharge a loan of P400000 at 10% compounded semiannually if
payment of P78806.99 is required at the end of every 6 months?
29.If deposits of P500 made at the end of each month for 4 years accumulate to
P25,465.60, find the rate at which money accumulates monthly.
30. At what interest rate payable quarterly will payments of P6000 at the end of
every 3 months for 2 years and 3 months, discharge a loan of P50000 principal and
interest included?