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
Question
Direction: Write ORDINARY if the problem displays an ordinary

Transcribed Image Text:Direction : Write Ordinary if the problem displays an ordinary annuity and General if it
displays General Annuity. Write your answer on the blank before each number.
Problem Set:
1. How much is the monthly amortization on an automobile loan of Php
900,000 to be amortized over a 5-year period at a rate of 9.5% compounded monthly.
2.Teacher Kaye is saving Php 2,000 every month by depositing it in a bank
that gives an interest of 1% compounded quarterly. How much will she save in 5 years?
3.A motorcycle is for sale at Php 60,000 cash or installment terms 3,000 per
month for 2 years at 12% compounded annually. If you were buyer, what would you prefer?
Cash or installment?
4.Belinda purchased a new car for php Php 99,000 downpayment and Php
15,000 every month. If the payments are based on 7% cpmpounded quarterly, what is the
total cash price of his car?
5.Ken is paying Php 2,500 every 3 months for the amount he borrowed at an
interest rate of 8% compounded quarterly . How much did he borrow if he agreed that the
loan will be paid in 2 years and 6 months?
6.A store advertises a product for Php 3,000 advance payment and Php 3,000
per month for 15months. If the interest is 15% compounded monthly, what is the actual
value of the product?
7.Mrs. Chan wants to buy a lot which costs 1 million pesos. She plans to give
a down payment of 20% of the cost, and the rest will be paid by financing at an annual
interest rate of 12% for 10 years in equal monthly installments ? How much will be the
monthly payment ?
8.A condominium unit is available at Php 29,000 monthly payable in 20 years
The first payment is due in 2 years exactly the time when the condominium will be turned
into the buyers. How much is the cash value if the interest rate is 10% convertible monthly?
9.Mr Reyes borrowed Php 50,000 from a cooperative to start a mini-store
business. If the cooperative charges simple interest of 5% , how much must Mr. Reyes pay in
3 years ?
10.Mr. Abdon bought a car and gave an initial payment of Php 180,000 as
down payment. The remaining balance is to be settled by paying Php 18,000 at the end of
each month for 5 years. If the interest is 10% compounded monthly, what is the cash price of
his car?
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