LESSON OBJECTIVES:

1. Define periodic payment

for ordinary annuities.
2. Solve for the periodic
payment of simple
annuities.

Find the present value and cash

value of the following ordinary
annuity: Down payment of
₱200,000 with remaining semi-
annual payments of ₱12,500 with
interest rate of 10.5%
compounded semi-annually for 6
years.
Definition of Term:
1.Regular or Periodic
Payment, R – the
amount of each
payment.
Periodic Payment R of an Annuity:
R=F /¿
R=P /¿
Where: R – regular payment
F – future value of an annuity
P – present value of an
annuity
j – interest rate per period
 n – number of payments
Example:
1. Paolo borrowed ₱100,000.
He agrees to pay the
principal plus interest by
paying an equal amount of
money each year for 3 years.
What should be his annual
payment if interest is 8%
compounded annually?
2. Mr. Ribaya would like to
save ₱500,000 for his son’s
college education. How much
should he deposit in a savings
account every 6 months for
12 years if interest is at 1%
compounded semi-annually?