Exercises
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1. A machine has a maintenance of P42,000 in 2nd year and P62,000 in the 6th year and P82,000 in the 8th year. If the interest is 8% compounded annually, determine the equivalent equal annual maintenance of the machine for a period of 12 years. a. P20,192.3 b. P18,912.1 d. P17,791.3 2. A company expects that the material cost of a certain manufacturing operation to be $12,000 per year. At an interest rate of 10% per year. The present worth of this cost over a five year project is _____. a. P46,341.9 b. P45,921.1 c. P45,762.8 d. P45,489.4 3. The maintenance cost of a machine this year is expected to be P5,200. The cost will increase P300 each year for the subsequent 9 years. The interest is 16% compounded annually. What is the approximate worth of maintenance for the machine over the full 10 years? a. P44,221.8 b. P44,193.6 c. P44,786.4 4. A parent on the day the child is born wishes to determine what lump sum would have to be paid into an account bearing interest at 8% compound annually, in order to withdraw P20,000 each on the child’s 18th, 9th, 20th and 21st birthdays. a. P17,681.0 b. P17,102.9 c. P17,876.3 d. P17,903.3 5. A piece of machinery can be bought for P11,000 cash, or P1,800 down and payments of P965.25 per year for 15 years. What is the annual interest rate for the time payments? a. 6.29% b. 5.26% c. 6.56% d. 5.72% 6. A house and lot can be acquired a down payment of P480,000 and a yearly payment of P160,000 at the end of each year for a period of 10 years, starting at the end of 5 years from the date of purchase. If the money is worth 13% compounded annually, what is the cash price of the property? a. P1,012,482.7 b. P1,109,218.1 c. P1,293,212.0 d. P1,341,091.7 7. A company issued 50 bonds of P1,600 face value each, redeemable at par at the end of 15 years. To accumulate the funds required for redemption, the firm established a sinking fund consisting of annual deposits, the interest rate of the fund being 5%. What was the principal in the fund at the end of the 10th year? a. P46,210.3 b. P46,031.6 c. P46,631.1 d. P46,928.1 8. A man borrowed P110,000 at 11% compounded annually for 11 years. And promised to pay the amount starting 5 years from now. Find the annual payment. a. P29,312.9 b. P29,600.2 c. P29,864.8 d. P29,561.8 9. A man borrowed P28,000 and promised to pay the amount annually for 10 years at the beginning each period with an interest rate of 15% compounded annually. Find the annual amount. a. P5,212.1 b. P5,579.1 c. P5,320.1 d. P5,480.9 10. A man deposits P52,500 and withdrawn P6,600 per year. Interest rate is 9% annually. In how many years will a deposit become zero? a. 13.5 years b. 14.6 years c. 15.5 years d. 16.0 years 11. A man deposits P5,100 each year in the bank and become P80,690 in 10 years with annual interest. Find the annual interest of the investment. a. 8.8% b. 7.5% c. 9.8% d. 12.1% 12. An employee wanted to have P115,000 at the end of 8 years. What amount must he put in the bank quarterly at 13% compounded quarterly interest? a. P2,102.4 b. P2,837.7 c. P2,736.8 d. P2,096.4 13. A man borrowed P21,000 and promised to pay equal amount for 12 years at 12% compounded annually. Find the annual amount. a. P1,892.2 b. P2,387.0 c. P2,672.7 d. P2,005.3 14. A man wants to have P2,000,000 in the bank 20 years from now. He deposits a uniform amount in the bank annually. Find the amount in the bank at the 15th year if the interest is 5% annually. a. P1,305,183.2 b. P1,652,982.0 c. P1,870,982.1 d. P1,600,827.5 15. A series of deposits of P1,200 bi-monthly starting today up to the 10th year. Find the amount at the 12th year if interest rate is 7% compounded bi-monthly. a. P182,291 b. P118,881 c. P139,988 d. P181,188 16. A man applied for a loan that pays P11,500 annually for 8 years starting today. If the interest rate is 8% annually, find the present amount of the loan. a. P66,201.4 b. P67,911.0 c. P66,086.3 d. P67,021.4 17. A series of bank deposits of P2,800 quarterly from 5th year to 11th year. If the interest rate is 15% compounded quarterly, find the total amount at the 15th year. a. P192,011.6 b. P193,912.9 c. P191,008.6 d. P190,210.8 18. Two, and increasing by $500 per year through the 10th year. At an interest rate of 8% per year, the present worth of maintenance cost is _____. a. $54,590.9 b. $55,921.8 c. $53,873.7 d. $56,998.6 19. A small company wants to have enough money saved to purchase a new $210,000 warehouse in five years. If the company can invest money at 15% per year, the amount that must be invested each year is ____. a. $31,146.3 b. $31,298.1 c. $31,336.7 d. $31,531.1 20. If a person deposits $250 per month into an account which pays interest at a rate of 7% per year compounded monthly, the amount in the account at the end of five years would be _____. a. $17,898.2 b. $18,989.3 c. $17,542.0 d. $18,562.1 |
Annuity 01
| Annuity 01 |
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(a) How many yearly withdrawals of P3,500 each can be made from P20,000 deposit at 10%. (b) If the remaining balance in the fund shall be given to a foundation on the payment date after the last withdrawal, how much will the foundation receive? SOLUTION: |
Annuity 02
| Annuity 02 |
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What will be the present worth and future worth of 10 equal end of the year deposits of P1,000 each at 12%. Solution: |
Gradient
| Gradient |
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Juan deposited P20,000 in the first year and committed to deposit an amount of P21,500 in the second year, P2,300 in the third year and so on, increasing the initial amount by P1,500 until the 8th year. If the interest rate is at 7% compounded annually, find the present worth of the money. Solution: |
