1. An employee obtained a loan of P 10,000 at the rate of 6% compounded annually in order to build a house. How much must he pay monthly to amortize a loan within a period of 10 years? 2. How much money would you have to deposit for 5 consecutive years starting one year from now if you want to be able to withdraw P 50,000 ten years from now? Assume the interest is 14% compounded annually. 3. A certain annuity pays P 80 at the end of every 3 months for 12 years. If the present value of the annuity is P 1,200 and the accumulated amount is P 2,000 determine the nominal rate. 4. An annual deposit of P 1,270 is placed on the fund at the end of each year for 6 years. If the fund invested has a rate of interest of 5% compounded annually. How| much is the worth of this fund at the end of 9 years? 5. A man owes P 10,000 with interest at 6% payable semi-annually. What equal payments at the beginning of each 6 months for 8 years will discharge his debt? 6. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be purchased by installment to be paid within 5 years. Money is worth 8% compounded annually. Determine the amount of each annual payment if all payments are made at the beginning of each year of the 5 years.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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1. An employee obtained a loan of P 10,000 at the rate of 6% compounded annually in
order to build a house. How much must he pay monthly to amortize a loan within a
period of 10 years?
2. How much money would you have to deposit for 5 consecutive years starting one
year from now if you want to be able to withdraw P 50,000 ten years from now?
Assume the interest is 14% compounded annually.
3. A certain annuity pays P 80 at the end of every 3 months for 12 years. If the present
value of the annuity is P 1,200 and the accumulated amount is P 2,000 determine
the nominal rate.
4. An annual deposit of P 1,270 is placed on the fund at the end of each year for 6
years. If the fund invested has a rate of interest of 5% compounded annually. How||
much is the worth of this fund at the end of 9 years?
5. A man owes P 10,000 with interest at 6% payable semi-annually. What equal
payments at the beginning of each 6 months for 8 years will discharge his debt?
6. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be
purchased by installment to be paid within 5 years. Money is worth 8%
compounded annually. Determine the amount of each annual payment if all
payments are made at the beginning of each year of the 5 years.
Transcribed Image Text:1. An employee obtained a loan of P 10,000 at the rate of 6% compounded annually in order to build a house. How much must he pay monthly to amortize a loan within a period of 10 years? 2. How much money would you have to deposit for 5 consecutive years starting one year from now if you want to be able to withdraw P 50,000 ten years from now? Assume the interest is 14% compounded annually. 3. A certain annuity pays P 80 at the end of every 3 months for 12 years. If the present value of the annuity is P 1,200 and the accumulated amount is P 2,000 determine the nominal rate. 4. An annual deposit of P 1,270 is placed on the fund at the end of each year for 6 years. If the fund invested has a rate of interest of 5% compounded annually. How|| much is the worth of this fund at the end of 9 years? 5. A man owes P 10,000 with interest at 6% payable semi-annually. What equal payments at the beginning of each 6 months for 8 years will discharge his debt? 6. A farmer bought a tractor costing P 12,000 if paid in cash. The tractor may be purchased by installment to be paid within 5 years. Money is worth 8% compounded annually. Determine the amount of each annual payment if all payments are made at the beginning of each year of the 5 years.
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