Activity 4 (SIMPLE ANNUITY)

II Identify whether the given illustrates Simple

Annuity or General Annuity.
I. Identify whether the given illustrates Simple Annuity or General Annuity.
( 10PTS)
1. A life insurance contribution paid monthly while the interest is compounded quarterly.

- General Annuity
2. Your mom decided to join their office cooperative and agreed to contribute P1000 per
month beginning in January 2021 which will earn 3% compounded monthly.

- Simple Annuity
3. Your parents are planning to save for their retirement. To do this, they want to set aside
a portion of their salaries and contribute monthly for their retirement funds which will
earn 5% compounded quarterly.

- General Annuity
4. Your eldest brother applied for a term life insurance. His contribution per year is P40 000
that earns 12% compounded monthly for 20 years.

- General Annuity
5. A college educational plan earns 4% compounded quarterly and payments are made
quarterly.

- Simple Annuity

I. Solve the following Problem (30Pts)

1. Find the present value and the future value of quarterly payments of P 2000 for 5 years
with interest rate of 8% compounded quarterly.

- FV= 48,594 ; PV= 32,702.87

2. How much should you invest in a fund each year paying 2% compounded annually to
accumulate P100, 000 in 5 years?

- 19,215.84
3. The value of a car requires a 169 000 cash down payment and a monthly payment of 12
000 if money is computed at 10% compounded monthly, how much is the cash price of
the car payable in 5 years?

- 753, 784.43