Problem 1 - Loan Amortization Ben and Jajust purchased a car. They financed the car with a four-year (48-month) P15,000 loan. The loans fully amortized after four years (ie., the loan will be fully paid off after four years). Loan payments are due at the end of each month. Theloan has a 12 percent nominal annual rate and the interest is compounded monthly. a, What are the monthly payments of the loan? b, Whats the effective annual rate on the loan? P15,000 1 1 12% /12 a= 026/13) =hsyo.u1 b. 12% / 12 months = 1% monthly compound interest 0.01? (number of periods per annum) = 1.126825 1.126825 ~ 1 = 0.126825 or 12.68% Problem 2- Future Value You deposited P1,000 in a savings account that pays 8 percent interest, compounded quarterly, planning to use it to finish your last year in the BS Accountancy course. Eighteen months later, you decide to take your challenge to South Beach and join the Miami Heat rather than continue in school (in other words, you decided to play basketball), so you close out your account. How much money will you receive? =P1000* (1.02)'*° = P1,126.16 *18 months converted to quarter (3 months per quarter) (18/3) is 6 compounding periods.Problem 3 - Present Value Assume that you will receive P2,000 a year in Years 1 through 5, P3,000 a year in Years 6 through 8, and 4,000 in Year 9, with all cash flows to be received at the end of the year. Ifyou require a 14 percent rate of return, what is the present value of these cash flows? Using 14% annual discounting rate for irregular cash flows: Future Cash Flow PV factor FCF x PVF 2,000.00 0.87719298 1,754.39. 2,000.00 0.76946753 1,538.94 2,000.00 0.67497152 1,349.94 2,000.00 0.59208028 1,184.16 2,000.00 0.51936866 1,038.74 3,000.00 0.45558655 1,366.76 3,000.00 0,39963732 1,198.91 3,000.00 0.35055905 1,051.68 4,000.00 0.30750794 1,230.03, 11,713.54 eed aHnewne