Problem #23. Mr. Bean borrowed Php100,000 at 10% effective annual interest rate. He must pay back the loan over 30 years with uniform monthly payments due on the first day of each month. What does he pay each month?

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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ANNUITY
Problem #23. Mr. Bean borrowed Php100,000 at 10% effective annual interest rate. He must pay back
the loan over 30 years with uniform monthly payments due on the first day of each month. What does
he pay each month?
Problem #24. An employee obtained a loan of Php10,000 at the rate of 6% compounded annually in
order to repair a house. How much must he pay monthly to amortize the loan within a period of ten
years?
Problem #25. The present value of an annuity of R pesos payable annually for 8 years, with the first
payment at the end of 10 years, is Php187,481.25. Find the value of R if money is worth 5%?
DEPRECIATION
Problem #26. What is the value of an asset after 8 years of use if it depreciates from its original value
of Php120,000 to its salvage value of 3% in 12 years?
Problem #27. A man bought an equipment which cost Php524,000.00 Freight and installation
expenses cost him Php31,000.00 If the life of the equipment is 15 years with an estimated salvage
value of Phpl120,000.00, find its book value after 8 years.
Problem #28. An equipment costing Php250,000 has an estimated life of 15 years with a book value
of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10
years using straight-line method.
Problem #29. An equipment costing Php250,000 has an estimated life of 15 years with a book value
of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10
years using straight-line method. Assuming i = 8%.
Problem #30. An equipment costing Php250,000 has an estimated life of 15 years with a book value
of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10
years using declining balance method.
Problem #31. An equipment costing Php250,000 has an estimated life of 15 years with a book value
of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10
years using the sum of the year's digit method.
Problem #32. A machine costing Php45,000 is estimated to have a salvage value of Php4,350 when
retired at the end of 6 years. Depreciation cost is computed using a constant percentage of the
declining book value. What is the annual rate of depreciation in %?
BREAK-EVEN
Problem #33. A Company that manufactures electric motors has a production capacity of 200 motors
a month. The variable costs are Php150.00 per motor. The average selling price of the motors is
Php275.00 Fixed costs of the company amount to Php20,000.00 per month which includes taxes.
The number of motors that must be sold each month to break even is closes to?
Problem #34. Determine the break-even point in terms of number of units produced per month using
the following data: (the costs are in pesos per unit)
600 pesos
Selling price per unit.....
Total monthly overhead expenses.... 428,000 pesos
Labor cost....
Cost of materials..
Other variable cost.
115 pesos
76 pesos
2.32 pesos
3/3
Transcribed Image Text:ANNUITY Problem #23. Mr. Bean borrowed Php100,000 at 10% effective annual interest rate. He must pay back the loan over 30 years with uniform monthly payments due on the first day of each month. What does he pay each month? Problem #24. An employee obtained a loan of Php10,000 at the rate of 6% compounded annually in order to repair a house. How much must he pay monthly to amortize the loan within a period of ten years? Problem #25. The present value of an annuity of R pesos payable annually for 8 years, with the first payment at the end of 10 years, is Php187,481.25. Find the value of R if money is worth 5%? DEPRECIATION Problem #26. What is the value of an asset after 8 years of use if it depreciates from its original value of Php120,000 to its salvage value of 3% in 12 years? Problem #27. A man bought an equipment which cost Php524,000.00 Freight and installation expenses cost him Php31,000.00 If the life of the equipment is 15 years with an estimated salvage value of Phpl120,000.00, find its book value after 8 years. Problem #28. An equipment costing Php250,000 has an estimated life of 15 years with a book value of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using straight-line method. Problem #29. An equipment costing Php250,000 has an estimated life of 15 years with a book value of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using straight-line method. Assuming i = 8%. Problem #30. An equipment costing Php250,000 has an estimated life of 15 years with a book value of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using declining balance method. Problem #31. An equipment costing Php250,000 has an estimated life of 15 years with a book value of Php30,000 at the end of the period. Compute the depreciation charge and its book value after 10 years using the sum of the year's digit method. Problem #32. A machine costing Php45,000 is estimated to have a salvage value of Php4,350 when retired at the end of 6 years. Depreciation cost is computed using a constant percentage of the declining book value. What is the annual rate of depreciation in %? BREAK-EVEN Problem #33. A Company that manufactures electric motors has a production capacity of 200 motors a month. The variable costs are Php150.00 per motor. The average selling price of the motors is Php275.00 Fixed costs of the company amount to Php20,000.00 per month which includes taxes. The number of motors that must be sold each month to break even is closes to? Problem #34. Determine the break-even point in terms of number of units produced per month using the following data: (the costs are in pesos per unit) 600 pesos Selling price per unit..... Total monthly overhead expenses.... 428,000 pesos Labor cost.... Cost of materials.. Other variable cost. 115 pesos 76 pesos 2.32 pesos 3/3
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