BMAT2-X

Problem Set 4

Directions: Solve each of the following problems. Write your solutions neatly, and when applicable,
box your final answer.

1. Mr. Hernandez owes the following debts:

a) Php10,000 due in 2 years, and
b) Php345,000 due in 5 years with accumulated interest from today at 12% compounded
quarterly.
If he wants to replace these debts by a payment of Php150,000 on the second year and
another payment at the end of 4 ½ years, how much is the second payment if money is
worth 16% compounded semi-annually?

2. What two equal payments at the end of 2 years and 5 years will replace the following
interest-bearing debts:
a) Php53,000 due in 3 years with accumulated interest from today at 9% compounded
quarterly.
b) Php60,000 due in 6 years with accumulated interest from today at 10% compounded
semi-annually.
Money is worth 12% effective rate.

3. What three equal payments at the end of 3 years, 6 years and 9 years will equitably replace
the following interest-bearing debts:
a) Php40,000 due in 1 year with accumulated simple interest from today at 10%.
b) Php50,000 due in 4 years with accumulated interest from today at 14% (m = 2).
c) Php75,000 due in 10 years with accumulated interest from today at 15% effective.
Money is worth 12% compounded semi-annually.

4. Jane deposited Php20,000 in a bank paying 6% compounded quarterly during the first two
years, 8% compounded semi-annually for the next two and a half years and 12% compounded
monthly for the last three and a half years. How much would she have in her account by the
end of 8 years, assuming no withdrawals were made?

5. Eusef invested his Php18,000 at 11% compounded semi-annually for 5 ¾ years in an

investment house. Then, the amount was deposited in a bank where it earned 8%
compounded quarterly. How much money will he be able to withdraw 6 years after he made
the deposit?

R. Nocon