A man borrows P40,000 with interest rate of 8%

compounded quarterly. He agrees to discharge his

obligation by making a series of equal payments, with the
first due at the end of two years and the last at the end of
seven years. Find the amount of each quarterly payment.

Answer: R=2,701.01
 If money is worth 10%, compounded quarterly,
find the present value of a sequence of
quarterly payments of P45,000 each, with the
first due at the end of 2 1/2 years and the last
at the end of 5 years.

Answer: P = 342,823.35
Amount borrowed 50,000
Periods (n) 8
i=r/m 0.03
Payment R ₱7,122.82

Principal Balance
Period Payment Interest Paid(balance*rate)
1 50,000 ₱7,122.82 1500.00
2 ₱44,377.18 ₱7,122.82 1331.32
3 ₱38,585.68 ₱7,122.82 1157.57
4 ₱32,620.43 ₱7,122.82 978.61
5 ₱26,476.22 ₱7,122.82 794.29
6 ₱20,147.69 ₱7,122.82 604.43
7 ₱13,629.30 ₱7,122.82 408.88
8 ₱6,915.36 ₱7,122.82 207.46
6982.56
 Problem
A debt of P50,000 with interest at 12% compounded quarterly must be paid a
3 months for 2 years.
a. Find how much the amount of quarterly payment.
b. Find the remaining liability just after making the 6th payment.
c. Construct the amortization schedule.
Payment for Principal(payment-interest)
₱5,622.82
₱5,791.50 Given: P = 50,000 i = 0.12/4 n = 2*4
₱5,965.25
₱6,144.21 a. Quarterly Payment b. remaining liability after 6th payment
₱6,328.53 𝑅=(50,000×0.03)/(1−(1.03)^(−8) ) P=7122.82
₱6,518.39 (1−(1.03)^(−2))/0.03
₱6,713.94
₱6,915.36 𝑹=𝟕,𝟏𝟐𝟐.𝟖𝟐 𝑷=𝟏𝟑,𝟔𝟐𝟗.𝟑𝟎
ed quarterly must be paid at the end of every

t.
6th payment.

ability after 6th payment

2
)^(−2))/0.03
 Problem
Alfred borrows P50,000 at 16% compounded semi-annually. He agreed to pay his debt by
paying P5,000 every 6 months. A final smaller payment is to be made after the last regular
payment.

How to find n? Equation of value:

𝑛= 〖− log 〗⁡[1−𝑃𝑖/𝑅]/log⁡(1+𝑖) 𝑥=𝑃(1+𝑖)^𝑛−𝑅[((1+𝑖)^(𝑛−1)−1)/𝑖 (1+𝑖)]

Solutions:
Given: A = 50,000 R = 5,000 i = 0.16/2

𝑛= 〖− log 〗⁡[1−(50,000×0.08)/5000]/log⁡(1+0.08)
𝑥=50,000(1+0.08)^21−5,000[((1+0.08)^(21−

𝒏=𝟐𝟎.𝟗𝟏 𝒙=𝑷𝟒,𝟓𝟕𝟕.𝟎𝟖
𝑛−1)−1)/𝑖 (1+𝑖)]

00[((1+0.08)^(21−1)−1)/0.08 (1+0.08)]
Amount borrowed 50,000
Periods 20.91
rate i=r/m 0.08
Payment R ₱5,000.00

Principal Payment for

Period Balance Payment Interest Paid Principal
1 50,000 ₱5,000.00 4000.00 ₱1,000.00
2 ₱49,000.00 ₱5,000.00 3920.00 ₱1,080.00
3 ₱47,920.00 ₱5,000.00 3833.60 ₱1,166.40
4 ₱46,753.60 ₱5,000.00 3740.29 ₱1,259.71
5 ₱45,493.89 ₱5,000.00 3639.51 ₱1,360.49
6 ₱44,133.40 ₱5,000.00 3530.67 ₱1,469.33
7 ₱42,664.07 ₱5,000.00 3413.13 ₱1,586.87
8 ₱41,077.20 ₱5,000.00 3286.18 ₱1,713.82
9 ₱39,363.37 ₱5,000.00 3149.07 ₱1,850.93
10 ₱37,512.44 ₱5,000.00 3001.00 ₱1,999.00
11 ₱35,513.44 ₱5,000.00 2841.08 ₱2,158.92
12 ₱33,354.51 ₱5,000.00 2668.36 ₱2,331.64
13 ₱31,022.87 ₱5,000.00 2481.83 ₱2,518.17
14 ₱28,504.70 ₱5,000.00 2280.38 ₱2,719.62
15 ₱25,785.08 ₱5,000.00 2062.81 ₱2,937.19
16 ₱22,847.89 ₱5,000.00 1827.83 ₱3,172.17
17 ₱19,675.72 ₱5,000.00 1574.06 ₱3,425.94
18 ₱16,249.77 ₱5,000.00 1299.98 ₱3,700.02
19 ₱12,549.76 ₱5,000.00 1003.98 ₱3,996.02
20 ₱8,553.74 ₱5,000.00 684.30 ₱4,315.70
21 ₱4,238.04 ₱4,577.08 339.04 ₱4,238.04
₱4,660.96
Problem

A fund is created by making equal quarterly deposits of P10,000 at 12% compounded

quarterly.
a. determine the sum at the end of 2 years.
b. What is the amount in the fund after 5th deposit?
c. Construct the sinking fund schedule for 2 years.

Given: R = 10,000 i = 0.12/4 n = 4*2

a. Future Value b. after 5th deposit

𝐹=10,000 ((1+0.03)^8−1)/0.03 𝐹=10,000 ((1+0.03)^5−1)/0.03

𝑭=𝟖𝟖,𝟗𝟐𝟑.𝟑𝟔 𝑭=𝟓𝟑,𝟎𝟗𝟏.𝟑𝟏
Periods 8
rate i=r/m 0.03
Payment ₱10,000.00

In Fund at the
Period Interest Payment R In Fund at the End
Beginning
1 ₱10,000.00 ₱10,000.00
2 ₱10,000.00 ₱300.00 ₱10,000.00 ₱20,300.00
3 ₱20,300.00 ₱609.00 ₱10,000.00 ₱30,909.00
4 ₱30,909.00 ₱927.27 ₱10,000.00 ₱41,836.27
5 ₱41,836.27 ₱1,255.09 ₱10,000.00 ₱53,091.36
6 ₱53,091.36 ₱1,592.74 ₱10,000.00 ₱64,684.10
7 ₱64,684.10 ₱1,940.52 ₱10,000.00 ₱76,624.62
8 ₱76,624.62 ₱2,298.74 ₱10,000.00 ₱88,923.36
1. A loan will be discharged, principal and interest included at 18% payable semi-annually by payments of P5,000
the end of each six months for 8 years. (a)Find the original loan. (b) Make the amortization schedule. (c) Find the
remaining liability of debtor just after 4th payment?

2. Sam obtains P50,000 loan to be paid in annual payments of P5,000. If the creditor charges 6% effective:
a. how many regular payments will be required?
b. find he remaining liability just after the 6th payment?
c. how much interest is paid at the end of 5 years?
d. construct amortization table

3. Patric wants to have P1,500,00 in 7 years to buy a farm. He plans to make a sinking fund by depositing an amou
every 6 months. If the fund earns 18% compounded semi-annually,
a. find the semi-annual payments
b. construct sinking fund table.

4. At the end of every 6 months Dennis invests P5,000 in a sinking fund at 24% compounded semi-annually. At th
end of 5 years, the amount in the fund is just enough to pay off the principal of his interest-bearing loan at 15%
compounded semi-annually. Dennis pays the interest on the loan at the end of every semi-annum.
a. how much is in the fund at the end of 5 years?
b. determine the periodic expense of his loan
c. find the book value of the debt after the 6th deposit.
ually by payments of P5,000 at
ation schedule. (c) Find the

harges 6% effective:

fund by depositing an amount

ounded semi-annually. At the

erest-bearing loan at 15%
mi-annum.
 Balance ₱41,562.79
Payment 5000
Period 16
interest i=r/m 0.09

Period Balance Payment Interest Paid Payment for Principal

1 ₱41,562.79 5000 ₱3,740.65 ₱1,259.35
2 ₱40,303.44 5000 ₱3,627.31 ₱1,372.69
3 ₱38,930.75 5000 ₱3,503.77 ₱1,496.23
4 ₱37,434.52 5000 ₱3,369.11 ₱1,630.89
5 ₱35,803.63 5000 ₱3,222.33 ₱1,777.67
6 ₱34,025.95 5000 ₱3,062.34 ₱1,937.66
7 ₱32,088.29 5000 ₱2,887.95 ₱2,112.05
8 ₱29,976.23 5000 ₱2,697.86 ₱2,302.14
9 ₱27,674.10 5000 ₱2,490.67 ₱2,509.33
10 ₱25,164.76 5000 ₱2,264.83 ₱2,735.17
11 ₱22,429.59 5000 ₱2,018.66 ₱2,981.34
12 ₱19,448.26 5000 ₱1,750.34 ₱3,249.66
13 ₱16,198.60 5000 ₱1,457.87 ₱3,542.13
14 ₱12,656.47 5000 ₱1,139.08 ₱3,860.92
15 ₱8,795.56 5000 ₱791.60 ₱4,208.40
16 ₱4,587.16 5000 ₱412.84 ₱4,587.16
Given
FV 1500000
i=r/m 0.09
n=mt 14
Payment R 57649.76

a.
In Fund at the In Fund at
Period Interest Deposit
Beginning the End

1 57649.76 57649.76
2 57649.76 5188.48 57649.76 120488.00
3 120488.00 10843.92 57649.76 188981.68
4 188981.68 17008.35 57649.76 263639.79 =(15000
5
6
263639.79
345017.13
23727.58
31051.54
57649.76
57649.76
345017.13
433718.43
([( 〖 1.0
7 433718.43 39034.66 57649.76 530402.85 .76
8 530402.85 47736.26 57649.76 635788.87
9 635788.87 57221.00 57649.76 750659.63
10 750659.63 67559.37 57649.76 875868.75
11 875868.75 78828.19 57649.76 1012346.70
12 1012346.70 91111.20 57649.76 1161107.66
13 1161107.66 104499.69 57649.76 1323257.11
14 1323257.11 119093.14 57649.76 1500000.01
=(15000000(.09))/
([( 〖 1.09) 〗 ^14−1])=57649
.76