6. An engine is offered for installment basis which can be purchased by paying P 2,400 each month for 24 months, the first payment is paid immediately on the time of purchased. The interest of money is 10% compounded monthly. Compute the cash value of the engine. 7. Equal – quarterly deposits of P 2,000 for 2 years which starts immediately is made at a savings account that earns 4% compounded quarterly. What is the amount in the account when the last deposit is made? What is the amount in the account at the end of the last quarter? 8. An amount of P 250,000 is deposited now into a savings account that earns 8% per year. This amount will take care for the yearly allotment of a grandmother until she dies. The first allotment will be one year after the deposit is made. How much can the grandmother withdraw every year? 9. Maintenance of a small building amount to P 100,000 every year for the next 5 years and will increase to P 150,000 the next years thereafter. If money is worth 6% per year, how much could be invested now to take care of the building maintenance? 10. A present obligation of P 20,000 is to be paid by 5 equal end of the year payments of which includes the principal and the interest of the debt. If money is worth 12% compounded continuously, what is the amount of each repayment?

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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6. An engine is offered for installment basis which can be purchased by paying P 2,400
each month for 24 months, the first payment is paid immediately on the time of
purchased. The interest of money is 10% compounded monthly. Compute the cash
value of the engine.

7. Equal – quarterly deposits of P 2,000 for 2 years which starts immediately is made at a savings account that earns 4% compounded quarterly. What is the amount in the
account when the last deposit is made? What is the amount in the account at the end
of the last quarter?
8. An amount of P 250,000 is deposited now into a savings account that earns 8% per year. This amount will take care for the yearly allotment of a grandmother until she
dies. The first allotment will be one year after the deposit is made. How much can the
grandmother withdraw every year?
9. Maintenance of a small building amount to P 100,000 every year for the next 5 years and will increase to P 150,000 the next years thereafter. If money is worth 6% per year, how much could be invested now to take care of the building maintenance?
10. A present obligation of P 20,000 is to be paid by 5 equal end of the year payments of which includes the principal and the interest of the debt. If money is worth 12%
compounded continuously, what is the amount of each repayment?

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