ANSWERS

Problem 1 (Use Table 2)

PV = FVn (PVIFi,n)

a) ₱ 8,000 x .558 = ₱4,464

b) ₱16,000 x .567 = ₱9,072
c) ₱25,000 x .315 = ₱7,875
d) ₱ 1,000 x .001 = ₱1

Problem 2 (Use Table 1)

FVn = PV (FVIFi,n)

a) ₱12,000 x 1.501 = ₱18,012

b) ₱12,000 x 5.474 = ₱65,688
c) ₱12,000 x 10.835 = ₱130,020
d) ₱12,000 x 11.467 = ₱137,604 (5%, 50 periods)

Problem 3 (Use Table 2 and Table 4)

PV = FVn (PVIFi,n)

a) ₱12,000 x .507 = ₱6,084

b) ₱15,000 x .315 = ₱4,725

PVOA n = A (PVIFA i,n)

c) ₱ 5,000 x 6.710 = ₱33,550

d) ₱40,000 x 17.159 = ₱686,360

Problem 4 (Use Table 2)

PV = FVn (PVIFi,n)

= (₱30,000) x (.593) = ₱17,790

Problem 5 (Use Table 3)

FVOAn = A (FVIFAi,n)

= (₱1,500) x (13.181) = ₱19,771.50

Problem 6 (Use Table 4)

Rewrite the Equation PVOA n = A (PVIFA i,n) to solve for the interest rate. Dividing both sides of the
equation by A gives a new equation: PVIFA i,n = PVOA n ÷ A. Now, solve the new equation as follows:

PVIFA i,6 = ₱20,000 ÷ ₱5,142.71 = 3.889

Look up PVIFA of 3.889 for six years in Table 4 and the result is an interest rate of 14 percent.