BMAT2-X

Module 3 In-class Problems

1. Find the amount and present value of an ordinary annuity of 15 annual payments of
Php25,000 each if money is worth 7%.
2. A housewife deposits Php10,000 every 3 months for 7 years in a savings account that pays 4%
compounded quarterly. How much would she have in her account at the end of 7 years,
assuming no withdrawals were made?
3. A furniture set is purchased with a downpayment of Php7,500 and the balance at Php1,000 a
month for 2 years. What is its cash price if the interest rate is 18% converted monthly?
4. How much should be invested each year in a fund paying 6 ½% effective to accumulate
Php1,500,000 in 10 years?
5. A television set costs Php25,000. It is purchased on terms – Php5,000 down and the balance in
15 monthly payments. If the interest is 12% compounded monthly, how much is the monthly
payment?
6. How much should be placed in a fund every 6 months in order to have Php350,000 in 10 years,
if the money accumulates at 12% compounded semi-annually.
7. A loan of Php1M with interest at 15% compounded semiannually is to be repaid by 25 equal
payments made at the end of each 6 months. Find the semiannual payment.
8. A video camera is worth Php35,950. Nancee bought one by paying Php5,000 cash and equal
payments at the end of every month for 18 months. Find the monthly payment if the rte of
interest is 18%, m = 12.
9. Paul Angelo will need Php150,000 on Oct. 8, 2015. To realize this, he will place equal deposits
at the end of each year in a fund earning 10% compounded annually. How much is the annual
deposit if the first deposit is on Oct. 8, 2009 and the last on Oct. 8, 2015?
10. At what nominal rate compounded semi-annually is Php50,000 the present value of a
Php10,000 ordinary annuity payable semi-annually for 3 years?
11. A computer is worth Php30,000. A buyer bought it paying Php8,000 cash, with the balance in
monthly installments of Php500 for 60 months. At what nominal rate converted monthly did
the buyer pay?
12. A man invests Php10,000 every 3 months. If he has Php390,000 in 7 years, at what nominal
rate compounded quarterly did his investment earn?
13. A man borrows Php500,000 with interest at 10% compounded semi-annually. He will discharge
the debt by paying Php40,000 semi-annually.
a) Find the number of regular payments to be made.
b) Find the final payment.
14. A fund of Php1,200,000 is to be created by depositing Php60,000 annually. If the fund earns
8%,
a) how many deposits of Php60,000 will be needed?
b) how much would have been the final deposit if it were to fall on the last full deposit
date?
c) how much will the final deposit be if it is made one year after the last full deposit?
15. In discharging a Php200,000 debt at 10% interest (m = 2), the debtor agrees to pay semi-
annually a sum for 7 years, plus a Php20,000 final payment on the 8th year. Find the semi-
annual payments.
16. A building costs Php25M. It is sold for Php5M downpayment and yearly payments of Php4M. If

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 money is worth 7% effective, find how many full payments there will be and how much the
final payment will be if it is made one year after the last payment of Php4M.
17. Jerome deposits Php7,800 at the beginning of each year at 6 ½% compounded annually. How
much money does he have in 8 years?
18. In buying a refrigerator, the buyer agreed to pay Php1,325 at the beginning of each month for
4 years. If money is worth 24% compounded monthly, what is the cash price?
19. A Php65,000 debt bears interest at 18% compounded quarterly. It is to be repaid in
installments at the beginning of every 3 months for 5 years. Find the quarterly payment.
20. To discharge a debt-bearing interest at 13% compounded semi-annually, a debtor promises to
pay 7 semi-annual payments of Php5,000 each, the first of which is due today. Find the sum
he borrowed.
21. How much must be deposited at the beginning of every 3 months in a fund giving 15%
compounded quarterly in order to have Php300,000 in 5 years?
22. Find the present value of a Php20,000 annuity payable annually for 5 years but deferred 3
years, if money is worth 7%.
23. If money is worth 16% compounded quarterly, find the present value of 15 quarterly payments
of Php10,000 each, the first of which is due at the beginning of the 4th year.
24. A house and lot can be bought for Php500,000 downpayment and 25 quarterly payments of
Php8,000 each. The first installment is due at the end of 5 years and 3 months. If money is
worth 12% compounded quarterly, how much is the cash value of the house and lot?
25. A man borrowed Php300,000 from a finance company that charges interest at 16%
compounded semi-annually. He promised to pay off the loan in 12 semi-annual payments. The
first payment is to be made at the end of 2 years. Find his semi-annual payment.
26. What sum, when invested at 13% (m = 2), will provide Php3,000 every 6 months forever?
27. A philanthropist donates Php5M to a university to provide an annual scholarship indefinitely.
The first scholarship is to be given in one year. If the money earns 12 ¾%, how much is the
annual scholarship?

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