-by Ms.

Audrey
1. Determine the value of P 20,000 in 5 years at 5% compounded quarterly.
2. A business needs to have P 100,000 in 5 years, How much must he put
into his 10% account in the bank assuming compound interest?
3. What is the interest rate compounded semi-annually that will have to be
earned in order for P500 to amount to P1104 in ten years?
4. How much interest is earned after 20 years by P20,000 at 4% interest
compounded monthly?
5. Jamie deposited P8,000 in a savings account for four years at 0.5%
compounded quarterly. How much will she have in her account at the end of
four years? How much will be the interest of her investment?
 1. Determine the value of P 20,000 in 5 years at 5% compounded quarterly.
GIVEN REQUIRED
P= P20000 F=?
n= 5 years
r= 5% (0.05)
m= 3
SOLUTION:
F=P(1+r/m)^mn
F=P20000(1+(0,05/3))^3(5)
F=P25627.649
2. A business needs to have P 100,000 in 5 years, How much must he put into
his 10% account in the bank assuming compound interest?
GIVEN: REQUIRED
F=P100,000 P=?
n=5 years
i= 10%(0.10)
SOLUTION
F=P(1+i)^n
P=F/(1+i)^n
P=P100,000/(1+0.10)^(5)
P=P62092.132
4. How much interest is earned after 20 years by P20,000 at 4% interest
compounded monthly?
GIVEN: REQUIRED
P=20,000 F=?
r=4%
m=12
n=20 yrs
SOLUTION
F=P(1+r/m)^mn
F=P20,000(1+(0.04/12))^12(20)
F=44451.642
5. Jamie deposited P8,000 in a savings account for four years at 0.5% compounded quarterly.
How much will she have in her account at the end of four years? How much will be the interest of
her investment?
GIVEN: REQUIRED
P=P8000 F=?
n=4 yrs I=?
r=0.05% OR 0.005
m=3
SOLUTION
F=P(1+r/m)^mn I=F-P
F=P8000(1+(0.005/3))^(4)(3) I=P8161.475-P8000
F=P8161.475 I=P161.475
Annuity certain - is an annuity whose term is fixed when the term starts
and ends on a definite date.
Contingent Annuity- an annuity whose term depends upon certain events
Ordinary Annuities- an ordinary annuity is a series of regular payments
made at the end of each period, such as monthly or quarterly.
Annuity Due- payments are made at the beginning of each period.
Simple Annuities- the payment interval coincides with the interest
compounding period.
General Annuity- the payment interval does not coincide with the interest
compounding period.