Name: AJ Monneth T.

Monreal Date: April 24, 2022

Year/ Course: BSED Math 1
MIDTERM EXAM
MATH 16
Problem Solving.
Directions: Solve the following problems thoroughly and box your final answer. See the
breakdown of your score per item below.

Part 1: Find the effective rate or the nominal rate.

1. Hymn invested her money at 3 ⅘% compounded bimonthly. Find the effective rate.
Given: j = 3 ⅘% or 3.8% or 0.038 m=6
Required: r
𝑗 𝑚
𝑟 = (1 + 𝑚
) −1
0.038 6
𝑟 = (1 + 6
) − 1
6
𝑟 = (1 + 0. 006333333) − 1
6
𝑟 = (1. 006333333) − 1
𝑟 = 1. 038606772 − 1
𝑟 = 0. 0386 𝑜𝑟 3. 86%

The effective rate is 0.0386 or 3.86%.

2. Sheila invested at a bank at 5 ⅞ %. They had an agreement that she would pay it
every three months in a year. Find the effective rate.
Given: j = 5 ⅞% or 5.875% or 0.05875 m=4
Required: r
𝑗 𝑚
𝑟 = (1 + 𝑚
) −1
0.05875 4
𝑟 = (1 + 4
) −1
4
𝑟 = (1 + 0. 0146875) − 1
4
𝑟 = (1. 0146875) − 1
𝑟 = 1. 060057056 − 1
𝑟 = 0. 0601 𝑜𝑟 6. 01%

The effective rate is 0.0601 or 6.01%.

3. Find the nominal rate if the money is compounded monthly and it is equivalent in a
15% effective rate.
Given: r = 15% or 0.15 m = 12
Required: j
𝑚
𝑗 = 𝑚( (1 + 𝑟) − 1)
12
𝑗 = 12( (1 + 0. 15) − 1)
12
𝑗 = 12( (1. 15) − 1)
𝑗 = 12(1. 011714917 − 1)
𝑗 = 12(0. 011714917)
𝑗 = 0. 1406 𝑜𝑟 14. 06%

The nominal rate is 0.1406 or 14.06%.

4. Hum’s money is invested. It is compounded bimonthly and it is equivalent in a 10%

effective rate. Find the value of the nominal rate.
Given: r = 10% or 0.10 m=6
Required: j
𝑚
𝑗 = 𝑚( (1 + 𝑟) − 1)
6
𝑗 = 6( (1 + 0. 10) − 1)
6
𝑗 = 6( (1. 10) − 1)
𝑗 = 6(1. 016011868 − 1)
𝑗 = 6(0. 016011868)
𝑗 = 0. 0961 𝑜𝑟 9. 61%

The nominal rate is 0.0961 or 9.61%.

Part 2: Solve the following annuities.

1. Angel spend Php 900 a month for milk tea. She realized that she wants to invest the
money instead. To double the money, she wants to invest it in a plan paying 15%
compounded quarterly. When will she double her money?
𝑗 0.15
Given: R = Php 900 j = 15% or 0.15 m=4 i= 𝑚
= 4
= 0. 0375
Sn = Php 1,800
Required: t
 𝑆𝑛𝑖
𝑙𝑜𝑔( 𝑅
+1)
𝑡= 𝑚(𝑙𝑜𝑔(1+𝑖))
(1,800)(0.0375)
𝑙𝑜𝑔( 900
+1)
𝑡= 4(𝑙𝑜𝑔(1+0.0375))
67.5
𝑙𝑜𝑔( 900
+1)
𝑡= 4(𝑙𝑜𝑔(1.0375))
𝑙𝑜𝑔(0.075 + 1)
𝑡= 4(0.015988105)
𝑙𝑜𝑔(1.075)
𝑡= 4(0.015988105)
0.031408464
𝑡= 0.06395242
𝑡 = 0. 4911223688
𝑡 = 0. 49

She will double the money in 0.49 years.

2. To have Php 19,000, Lei needs to have equal deposit every half of the year in a fund
that earns 9% for 7 years. How large should his every deposit be?
Given: Sn = Php 19,000 m=2 t=7 j = 9% or 0.09
𝑗 0.09
i= 𝑚
= 2
= 0. 045 n = tm = 7(2) = 14
Required: R
𝑆𝑛𝑖
𝑅 = 𝑛
(1+𝑖) −1
(19,000)(0.045)
𝑅 = 14
(1+0.045) −1
855
𝑅 = 14
(1.045) −1
855
𝑅 = 1.851944922−1
855
𝑅 = 0.851944922
𝑅 = 𝑃ℎ𝑝 1, 003. 59

He should deposit an amount of Php 1,003.59.

3. You made a deposit of Php 1000 every three months which pays 7%. After 5 years,
you did not deposit anymore. What will be the balance in the account 7 years after his
first deposit?
Given: R = Php 1000 j = 7% or 0.07 t=5 m=4
𝑗 0.07
i= 𝑚
= 4
= 0. 0175 n = tm + 1 = 5(4) + 1 = 21
Required: The balance in the account after 7 years
𝑛+1
(1+𝑖) −1
𝑆𝑑𝑢𝑒 = 𝑅( 𝑖
− 1)
21+1
(1+0.0175) −1
𝑆𝑑𝑢𝑒 = 1000( 0.0175
− 1)
22
(1.0175) −1
𝑆𝑑𝑢𝑒 = 1000( 0.0175
− 1)
(1.464728708−1
𝑆𝑑𝑢𝑒 = 1000( 0.0175
− 1)
(0.464728708
𝑆𝑑𝑢𝑒 = 1000( 0.0175
− 1)
𝑆𝑑𝑢𝑒 = 1000(26. 55592617 − 1)
𝑆𝑑𝑢𝑒 = 1000(25. 55592617)
𝑆𝑑𝑢𝑒 = 𝑃ℎ𝑝 25, 555. 93

The balance in the account is Php 25,555.93.

4. Your friend won in a singing contest paying Php 100,000 at the beginning of each
year for 5 years. What amount must be set aside today to satisfy this annuity at 13%
compounded semi-annually?
Given: R = Php 100,000 j = 13% or 0.13 t=5 m=2
𝑗 0.13
i= 𝑚
= 2
= 0. 065 n = tm = 5(2) = 10
Required: Adue
1−𝑛
1−(1+𝑖)
𝐴𝑑𝑢𝑒 = 𝑅( 𝑖
+ 1)
1−10
1−(1+0.065)
𝐴𝑑𝑢𝑒 = 100, 000( 0.065
+ 1)
−9
1−(1.065)
𝐴𝑑𝑢𝑒 = 100, 000( 0.065
+ 1)
1−0.567353227
𝐴𝑑𝑢𝑒 = 100, 000( 0.065
+ 1)
 0.432646773
𝐴𝑑𝑢𝑒 = 100, 000( 0.065
+ 1)
𝐴𝑑𝑢𝑒 = 100, 000(6. 6561042 + 1)
𝐴𝑑𝑢𝑒 = 100, 000(7. 6561042)
𝐴𝑑𝑢𝑒 = 𝑃ℎ𝑝 765, 610. 42

The amount that must be set aside today is Php 765,610.42.