ASSESSMENT: Show your complete and detailed solutions. 1. Fernan borrows money to buy a motorcycle. He will repay the loan by making monthly payments of P1 500 per month for the next 24 months at an interest rate of 9% per year compounded monthly. How much did Fernan borrow? How much interest does Fernan pay? S000.00 at the end of every six months in an educational plan that earns 6% per year nHeu much is the interest earned?
ASSESSMENT: Show your complete and detailed solutions. 1. Fernan borrows money to buy a motorcycle. He will repay the loan by making monthly payments of P1 500 per month for the next 24 months at an interest rate of 9% per year compounded monthly. How much did Fernan borrow? How much interest does Fernan pay? S000.00 at the end of every six months in an educational plan that earns 6% per year nHeu much is the interest earned?
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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Transcribed Image Text:ABM- Tibule 20-21 Gen MATH
0105 0.00875
n= 60
P= P16,200.00
Obtain the present value of the car by plugging the given in our formula
-(1+ 0.00875)-60
0.00875
P= 16,200 .
The present value of the car is P 753,702.20
To get the cash value, simply add the obtained present value and the downpayment made, so;
CV- 200,000 + 753,702.20
The total cash value of the car is P 973,702.20.
ASSESSMENT: Show your complete and detailed solutions.
1. Fernan borrows money to buy a motorcycle. He will repay the loan by making monthly payments of P1 500 per
month for the next 24 months at an interest rate of 9% per year compounded monthly. How much did Fernan
borrow? How much interest does Fernan pay?
2. Paul's mother saved P 5 000.00 at the end of every six months in an educational plan that earns 6% per year
compounded semi-annually. What is the amount at the end of 18 years? How much is the interest earned?
3. Alex and Toni are twins. After Graduation and being finally able to get a job they plan for retirement as follows.
Starting age 24, Alex deposits P 10 000.00 at the end of each year for 36 years.
Starting age 42, Toni deposits P 20 000.00 at the end of each year for 18 years.
Who will have a greater amount of retirement if both annuities earn 12% per year compounded annually?
CHALLENGE:
4. James obtained a loan of P 50 000.00 for the tuition fee of his son. He has to repay the loan by equal payments
at the end of every six months for 3 years at 10% interest compounded semi-annually. Find the periodic
payment.
5. Mr. dela rosa borrowed from his friend P 250,000.00 He promised to pay the amount plus its interest by an
equal amount of money each year for 5 years. What must be his quarterly payment if they agreed on an
interest of 15% compounded quarterly?
Future and Present Values of General
Annuity
Illustrative Example:
A four-year lease agreement between Alfred and Thrifty Mall Inc. (TMI) indicates that, Alfred pays TMI P100,000.00 at
the end of every year if the agreed interest rate is 5% compounded quarterly
In this example, the payment period is a whole year. However, the interest period is quarterly or every 3 months.
Hence, the annuity is a general annuity
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