1. Ms. A. Akira wants to buy a new Honda motorcycle.

A motorcycle dealership
offers a promo, where the retail price is P93,900, a down payment of
P15,000, and a monthly payment of P4,203 for 3 years. She is offered to pay
the amortization starting today (including the down payment), or next month.
Determine their interest rates.
a.
b.
c.
d.

47.24%;
47.87%;
47.63%;
47.29%;

52.97%
52.41%
52.39%
52.15%

Solution:
Given:
P = P93,900 P15,000 = P78,900
A = P4,203
n = 3 years
i.

Ordinary Annuity

P=

A
[1( 1+i )n ]
i

78,900=

4,203
i 312
[1 1+( )
]
i
12
12

%i=48.63
ii.

Annuity Due

P= A+

A
(n1)
[1( 1+i )
]
i

78,900=4,203+

4,203
i 35
[1 1+( ) ]
i
12
12

%i=52.39