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# GROUP 3 ( Sr. Jeanette F.

## / Gealone, Chinky / Billones,

Camille )
Problem # 5
Present Value of Ten P20,000 annuity payments with annual rate of
30% to be compounded semi-annually? The Ten payments will be
made in a span of 5 years (6 months in between two payments), of
which the first P20,000 payment will NOT be made on the start of the
first of the year.
Legend:
Principal
Rate
10 periods (5 years compounded semi-annually)
Solutions:

FVoa = R x [ (1 + i)n - 1]
i

= 10,000 x [ (1 + .15i)10 - 1]
.15

= 10,000 x [ ( 4. 04556) - 1]
.15

= 10,000 x 3.04556
.15

= 10,000 x 20.30373

= P203,037
Problem # 14
What is the total present value of the following set of cash flows for
one company? The interest rate is 8% for all cash flows. Assume that
the cash flow would come at the end of the year.
Year and Cash Flows
1: 300
2: 500
3: 700
4: 1,000
Legend:
4 Years

Rate
Total Cash for four years ( P2,500 )
Solutions:

PVoa = R x [ 1 - ( 1 + i)n ]
i

= 2,500 x [ 1- (1 + .08)-4 ]
.08

= 2,500 x [ 1 - ( 1.08) -4 ]
.08

= 2,500 x [ 1- 0.73503 ]
.08

P8,280.31
.08