Long Test No.

1 (Business Mathematics)
FINALS

Fill in the blanks with the correct answer.

1. When money is compounded monthly, the frequency of conversion is ____.
2. When the annual interest rate is 16% compounded quarterly the interest rate in
conversion period is ______.
3. If the interest rate per conversion is 1% and money is compounded monthly, the
nominal rate is ______
4. When the term is 3 years and 6 months and money is compounded semi-annually, the
total number of conversion period is ___
5. When the umber of conversion period is 12 and the term is 6 years, then money is
compounded _____
Problem Solving: Show your solution.
6. Suppose that you have Php80 000.00. You decided to deposit it on a bank and will not
withdraw from it in 10 years. A bank offers 2 types of compound interest accounts. The
first account offers 6% interest compounded monthly. The second account offers 6.5%
interest compounded semi-annually. Which account will you choose to earn more?
7. Peter is planning to invest Php100 000.00. Bank A is offering 5% compounded semi –
annually while Bank B is offering 4.5% compounded monthly. If he plans to invest this
amount for 5 years, in which bank should he invest?
8. At what nominal rate compounded semi-annually will Php10 000.00 accumulate to
Php15 000.00 in 10 years?
9. At what interest rate compounded quarterly will money double itself in 10 years?
10. What equivalent rate is equivalent to 10% compounded quarterly?

Complete the table. Show your solution.

Given Interest Rate Equivalent Interest Rate

0.5% compounded semi-annually ___ compounded annually
6% compounded quarterly ___ compounded semi-annually

Find the unknown. Show your solution.

13. F = Php30 000.00, P=Php10 000.00 nominal rate 16% compounded quarterly.