GE1707

Name: Section:
Date: Score:

Direction: Provide the step-by-step solutions to the following problems. (5 items x 5

points)

1. What will be the maturity value of ₱12,000 invested for four (4) years at 15%
compounded quarterly?

Given: Solution:
F = 3,000 pesos P = F (1 + I) -n
T = 4 years = 12, 000 (1.0375)-16
M = 4 P = 6, 658.42
N = tm = 4 (4) = 16
J = 15% = 0.15
I = j/m = 0.15/4 = 0.0375

2. Determine the maturity value of ₱3,000 invested at 9.5% compounded semiannually

for 3 ½ years.

Given: Solution:
F = 3,000 P = F (1 + I) -n
T = 3 ½ years = 3.05 years = 3,000 (1 + 0.0475)-7
M = 2 P = 2,167.92
N = tm = 3.05 (2) = 7
J = 9.5% = 0.095
I = j/m = 0.095/2 = 0.0475

3. What amount must be invested now in savings account earnings 9% compounded

quarterly to
accumulate a total of ₱21,000 after 4 ¾ years?

Given: Solution:
P = 21,000 F = P(1+i) n
T = 4 ¾ years = 4.75 years = 21,000 (1+ 0225)19
M = 4 F = 32, 049.58
N = tm = 4.74 (4) = 19
J = 9% = 0.09
I = j/m = 0.09/4 = 0.225

4. Millet wants to provide a ₱200,000 graduation gift for her daughter Mae who is
now 16 years old. She would like the fund to be available by the time her
daughter is 20. She decides on an investment that pays 10% compounded quarterly.
How large must the deposit be?

Given: Solution:
F = 200,000 P = F (1 + I) -n
T = 4 years = 200,000
(1 + 0.025) -16
M = 4 P =
134,724.99
N = tm = 4 (4) = 16
J = 10% = 0.10
I = j/m = 0.10/4 = 0.025
 5. Ms. Cruz can buy a piece of property for ₱6,500,000 cash or ₱4,000,000 down
payment and
₱4,200,000 in five (5) years. If she has money earning 8% converted quarterly,
which is a better purchased plan and by how much?

Given: Solution:
P = 2,500,000
T = 5 years
N = 4
R = 8 (4) = 32% = 0.32

11,652,392.86 in 5 years.
We then pay 4,200,000 to the loan.

We end up with 7,452,392.86.

05 Seatwork 1 *Property of STI
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