PERPETUITIES

PERPETUITY

is an annuity in which the periodic

repayments commence on a fixed date and
continue indefinitely.
 Problem 1

A man, pondering of retirement, determined that Php300,000

per year will be sufficient for him to live without the need to
work. Upon his retirement, how much must he invest in a bank
that offers 5% interest rate to receive the amount every year
continuously?
 Problem 2
Find the monthly payment of simple
perpetuity on P90,000 invested indefinitely
at 15% compounded monthly.
 Problem 3

On average, it needs Php 250,000 per year and an additional

Php 600,000 every 4 years for major repairs to maintain a
certain three-storey office building. How much must be paid
now to take care of these payments on a bank that offers 8%
per year?
 Problem 4
Find the payment every end of 6 months of simple
perpetuity of 320,000 invested indefinitely at 16%
compounded semi-annually.