Bank Loan. Felipe earned Php 10,000 interest in 55 days from a short-term investment that paid 7.5% interest per year. Find the amount initially invested.

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
icon
Related questions
Question
Topic: Simple and Compound Interest Please only answer the numbers 2-5. Thank you.
e Developing Mastery
1. Loans Between Banks. Pia is deciding to borrow money from a bank to start her small business and to pay
her son’s tuition fee. Php 100,000 is the ideal amount to be borrowed. BDO offers simple interest rate of 5%
for 5 months while Chinabank offers simple interest rate of 4% for 7 months.
a. Find the interest and maturity value from BDO.
b. Find the interest and maturity value from Chinabank.
c. Which is the better offer for Pia?
2. Bank Loan. Felipe earned Php 10,000 interest in 55 days from a short-term investment that paid 7.5%
interest per year. Find the amount initially invested.
3. Investing in Bonds. Tin invested Php 5,000 in an exmutual fund containing bonds. Find the rate if she
earned Php 375.50 in interest in 300 days.
4. Home Construction. Liza needs to borrow Php 500,000 for 1 year for materials needed to build her house.
She can borrow from either of two banks. Interest charges from BDO would amount to Php 35,000, whereas
interest charges from BPI would amount to Php 25,000. Find the interest rates associated with a loan from
(a) BDO and (b) BPI.
5. Interest Rate. John must pay the bank Php 25,250 in interest 2500 days after making a loan of Php 75,000
to purchase hot air balloons. Determine the interest rate.
Transcribed Image Text:e Developing Mastery 1. Loans Between Banks. Pia is deciding to borrow money from a bank to start her small business and to pay her son’s tuition fee. Php 100,000 is the ideal amount to be borrowed. BDO offers simple interest rate of 5% for 5 months while Chinabank offers simple interest rate of 4% for 7 months. a. Find the interest and maturity value from BDO. b. Find the interest and maturity value from Chinabank. c. Which is the better offer for Pia? 2. Bank Loan. Felipe earned Php 10,000 interest in 55 days from a short-term investment that paid 7.5% interest per year. Find the amount initially invested. 3. Investing in Bonds. Tin invested Php 5,000 in an exmutual fund containing bonds. Find the rate if she earned Php 375.50 in interest in 300 days. 4. Home Construction. Liza needs to borrow Php 500,000 for 1 year for materials needed to build her house. She can borrow from either of two banks. Interest charges from BDO would amount to Php 35,000, whereas interest charges from BPI would amount to Php 25,000. Find the interest rates associated with a loan from (a) BDO and (b) BPI. 5. Interest Rate. John must pay the bank Php 25,250 in interest 2500 days after making a loan of Php 75,000 to purchase hot air balloons. Determine the interest rate.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Techniques of Time Value Of Money
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
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…
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