Pipoy plans to buy a car for P1,000,000 in 5 years.

How much money should he ask his parents for now so that, if he invest

FV 1,000,000 550449.616
time 5
periodic interest 1%
nom int rate 0.12

How long does it take for an investment to quadruple in value if it is invested at 3.75% periodic interest compounded quarte

A = P (1+inom/m)^(m*t) 4.002062
A = P (1+i)^(n)
n= log (A/P)
log (1+i)

37.65674 9.414186 9 years

0.414186 4.97023197 4 months
0.970232 29.1069591 30 days

Nathan has some extra money he would like to put into a savings account. He's trying to pick a bank in which to open the a
Bank A offers 6% interest compounded monthly; Bank B offers 7% interest compounded annually; and Bank C offers 0.25%
EffRate = [(1+i)^(m)] - 1
Bank A 0.061678
Bank B 0.07 Bank B
Bank C 0.067072

What nominal rate compounded daily (assuming leap year) will yield an effective rate of 6%?
EffRate = [(1+i)^(m)] - 1

(1+i)^(m)=1+ER
(1+i) = (m)√(1+ER)
I =[ (m)
√ (1+ER)] -1

0.000159
5.83%

What periodic rate compounded semi-annually is equivalent to 1% periodic rate compounded monthly (round of to four deci

(1+i)^(2) = (1+.01)^(12)
(1+i)^(2) = 1.12682503 1.126825
√ 1.12682503
(1+i) = (2)
i = 1.061520 - 1
I = 6.1520% I = 6.1520%
inom = 0.12304
Charlia is expecting P1,000,000 after 6 years from now, maturity of her interest. Currently she is in dire need of money after
If interest charged was 4% periodic interest compounded bimonthly, how much can she loan today and assign her maturin

FV 1,000,000 243668.722
4%, bi monthly

1.        Laling has a P25,000 overdue debt for medical books and supplies at Angelyn’s Bookstore. She has only P15,000 in h
want her parents to know about her debt. Ayesha tells her that she may settle the account in one of two ways since she ca
a.        Pay P15,000 now and the rest when he completes his residency, 3 years from today.
b.        Pay P28,000 one year after completion of residency, 4 years from today.
Assuming that the cost of money is the only factor in Laling’s decision and that the cost of money to her is 6% periodic inte
effective interest rate of 12.36%, which alternative should he choose and why?

22049.6054 22049.6054
17567.5464 17567.5464 Choose the second payment b

Use the information in number 7 and consider the data in letter b, what should he pay 5 years from today to be indifferent a
31460.8

Kare owes P300,000 due in 5 years and P450,000 due in 8 years. She and her creditor have agreed to settle the debts by tw
of which the second payment’s equivalent value three years from today is 1.5x of the first payment. Find the size of the fir

3 5
300,000
1
1.5 1.89371544
1.26247696
488905.7
2.5

195562.3

293343.4 370339.34592
1.5 1.89371544
1.26247696

Kare owes P300,000 due in 5 years and P450,000 due in 8 years. She and her creditor have agreed to settle the debts by tw
of which the second payment’s equivalent value three years from today is 1.5x of the first payment. Find the size of the se

370339.34592
Mayang owes P400,000 due in five years with 10% interest compounded semi-annually. She and her creditor have agreed
The first one is in three years, worth twice of the second payment, and an amount in four years. Find the size of the payme

0 3 4
400,000
2x x
2 1
0.892857
2.892857

519417.9

12 179551.87685
11 359103.8

Mayang owes P400,000 due in five years with 10% interest compounded semi-annually. She and her creditor have agreed
The first one is in three years, worth twice of the second payment, and an amount in four years. Find the size of the payme

179551.87685

Sayun Corporation has a contractual debt outstanding. Sayun Corporation has available two means of settlement: It can ei
or it can make payment of P14,000,000 after 5 years. Which method of payment do you recommend, assuming an expecte

13500000 13500000 19835929

9528165 14000000 14000000

Use the information in number 13, what should the corporation pay in 5 years to be indifferent?

13500000 19835929

Pip Jan Inc. has P600,000 to invest. The company is trying to decide between two alternative uses of the funds. Invest it @
at 13% compounded quarterly. Which alternative should Pip Jan Inc. select? Assume the interest rate is constant over the

0.126162
0.136476 13% compounded quarterly

Using the information in number 15, what interest rate should replace 13% for the company to be indifferent (both 13% an

(1+i)^(4) = (1+.02)^(6)
(1+i)^(4) 1.12616242
√ 1.1261624
(1+i) = (4)
i = 1.0301495 - 1
 I = 3.01495% 0.126165
inom = 0.120598
12.06%

Using the information in number 15, how many times should 13% be compounded every year for the company to be indiff

interpolate (1+inom/m)^(m) -1
annual 13% 0.13
0.129107
0.128014
0.7 0.126642
0.6 0.124872
x-Low
0.12616 High-Low

C-B
0.67 times A-B

0.729
6.729

Liling Inc. wishes to accumulate P10,000,000 at the end of 10 years, to retire bonds outstanding. How much should the com
10% compounded quarterly for 5 years and invest the money to another investment paying 1% periodic interest compoun

FV 10,000,000

0
3359234.0611

Diding owes P250,000 due in four years and P150,000 due in six years both debt are with 10% interest compounded semi-
by two payments in four and five years, respectively. The first payment is twice of the equivalent value of the second paym
Find the size of the first payment if money is worth 12% compounded quarterly.

0 4
250,000 369363.86095
150,000

2x
x
 194004.56535
19 388009.13069

Use the information in number 19, assuming all the data are the same, find the size of the second payment

Ketot owes P100,000 due in three years and P100,000 due in five years. She and her creditor have agreed to settle the deb
the equivalent value of which at year 6 is three times than the second one, is due in three years. While the second one is d
Find the size of the first payment if money is worth 12% compounded annually.

3
100,000

2.1353407434

21 134789.54082

Use the information in number 21, assuming all the data are the same, find the size of the second payment.

A long lost relative of Bletot paid P20,000 for a house a number of years ago. You inherit the property and sell it for P2,800
How many years ago was the house purchased?

A = P (1+inom/m)^(m*t)
A = P (1+i)^(n)
n= log (A/P)
log (1+i) A = 2800,000
P = 20,000
I = .17

31.4747 0.4747
5.6964 0.6964
20.892
for now so that, if he invests it at 1% periodic interest compounded monthly, he will have enough to buy the car?

nterest compounded quarterly?

bank in which to open the account, and he has narrowed it down to three.
lly; and Bank C offers 0.25% periodic interest compounded bi-weekly. Which bank should Nathan choose?

onthly (round of to four decimal places)

 in dire need of money after the super typhoon Yolanda.
oday and assign her maturing investment for payment?

e. She has only P15,000 in her checking account and doesn’t

ne of two ways since she can’t pay it all now.

ey to her is 6% periodic interest compounded semi-annually or an

oose the second payment because it has a lower equivalent value than the first payment

om today to be indifferent about his decision?

eed to settle the debts by two payments in three and five years,
ment. Find the size of the first payment if money is worth 12% compounded semi-annually.

8
450,000

eed to settle the debts by two payments in three and five years,
ment. Find the size of the second payment if money is worth 12% compounded semi-annually.
 d her creditor have agreed to settle the debt by two payments.
s. Find the size of the payment in year three if money is worth 12% compounded annually

5
651557.85071

651557.85071

d her creditor have agreed to settle the debt by two payments.

s. Find the size of the payment in year four if money is worth 12% compounded annually.

eans of settlement: It can either make immediate payment of P13,500,000,

mend, assuming an expected effective-compound interest rate of 8% during the future period?

Make payment of 14,000,000 after 5 years

ses of the funds. Invest it @ 2% periodic interest compounded bi-monthly or

st rate is constant over the entire investment.

be indifferent (both 13% and the new rate are compounded quarterly)
or the company to be indifferent?

0.1261624193
0.1261624193

High-x
High-low

A-C
A-B

0.271
6.729

g. How much should the company deposit today if it will earn interest of
periodic interest compounded monthly for another 5 years?

.10, quarterly .12, monthly

5 10
5504496.1594 10,000,000

10000000

nterest compounded semi-annually. She and her creditor have agreed to settle the debts
nt value of the second payment at the fourth year.

5 6

269378.449

2
1 1.12550881
3
 582013.69604

194004.56535

20 218353.84748

1.12550881

nd payment

ave agreed to settle the debts by two payments. The first payment,
s. While the second one is due in six years.

5 6
140492.8
100,000 112000
3 3x
1x
4
252492.8

22 63123.2
189369.6

nd payment.

operty and sell it for P2,800,000. Inflation is calculated at 17% calculated annually.

31 years
5 months
21 days