Industrial Assessment

College Program B.S.H.M. 4

Technology No.
Course Course Business Semester/ 2nd Sem. 2022-
NATBUF103
Code Title Finance AY 2023
Student SOBELARIO, Yr. &
1C Instructor Benjie C. Alimon
Name ROMEL B. Section

I. Essay (20 pts.)

In your own words, explain the concept of the Time Value of Money, “Money
today is worth than money tomorrow, Money tomorrow is worth than
money in the future.”
Answer: The Time Value of Money is the idea that money available today is worth more than the
same amount in the future, because of its potential to earn interest or other returns over time.
Conversely, money in the future is worth less than the same amount today, because of the
potential loss of interest or other returns that could have been earned if the money were available
earlier. In other words, the value of money changes over time due to the effects of inflation and
the opportunity cost of delayed consumption or investment.

II. Simple Interest (50 pts.)

Anne Murray invested ₱50,000 for 5 years at 10% interest per year and the
proceeds from the investment will be collected at the end of 5 years. Using a
simple interest assumption, calculate the cumulative interest of Anne Murray per
year for 5 years:
1. Prepare a table showing the cumulative interest. (25 pts.)

Year Principal Interest Cumulativ Total

e Interest
1 ₱50,000 50,000 x 0.10= 5,000 5,000 55,000
2 ₱50,000 50,000 x 0.10= 5,000 10,000 60,000
3 ₱50,000 50,000 x 0.10= 5,000 15,000 65,000
4 ₱50,000 50,000 x 0.10= 5,000 20,000 70,000
5 ₱50,000 50,000 x 0.10= 5,000 25,000 75,000

2. Calculate using the Simple Interest Equation. (25 pts.)

Given
Principal- ₱50,000
Rate- 10%
Time- 1,2,3,4 and 5 years

I=P x R x T

Year 1
I=50,000 x 0.10 x 1
I= ₱5,000

Year 2
I=50,000 x 0.10 x 2
I= ₱10,000

Year 3
I=50,000 x 0.10 x 3
I= ₱15,000

Year 4
I= 50,000 x 0.10 x 4
I= 20,000

Year 5
I= 50,000 x 0.10 x 5
I=25,000