1. What is the present worth of a P1000 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 15%?
1. What is the present worth of a P1000 annuity starting at the end of the third year and continuing to the end of the fourth year, if the annual interest rate is 15%?
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
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Question
Transcribed Image Text:Simple Annuity
Solve the following problems. Show a complete and detailed solution.
What is asked? What are given? Formula to be used and a detailed solution.
Write legibly and neatly.
1. What is the present worth of a P1000 annuity starting at the end of the third
year and continuing to the end of the fourth year, if the annual interest rate is
15%?
2. Find the annual payment to extinguish a debt P15,000 payable for 6 years at
12% interest annually.
3. A factory operator bought a diesel generator set for P 20,000.00 and agreed to
pay the dealer uniform sum at the end of each year for 5 years at 8.5% interest
compounded annually, that the final payment will cancel the debt for principal
and interest. What is the annual payment?
4. A man paid 10% down payment of P200,000 for a house and lot and agreed to
pay the 90% balance on monthly installment for 60 months at an interest rate of
10% compounded monthly. Compute the amount of the monthly payment.
5. What is the accumulated amount of five-year annuity paying P 10,000 at the end
of each year, with interest al 6.5% compounded annually?
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