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.
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
Problem 1PS
Related questions
Concept explainers
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education