Republic of the Philippines

BATANGAS STATE UNIVERSITY

COLLEGE OF ACCOUNTANCY BUSINESS ECONOMICS AND
INTERNATIONAL HOSPITALITY MANAGEMENT
CITE Building, Pablo Borbon Main 1, Rizal Avenue, Batangas City

GENERAL DIRECTIONS
Accomplish this requirement in yellow sheet of paper only. Kindly upload your
work with a file name (Last Name, First Name, Section, Chapter 7 Test) in our
Google Classroom. Good luck and God bless!
DIRECTION: Kindly answer the following items carefully. Provide your COMPLETE
solutions per item. (30 points)
NOTE: No solution. NO CREDIT. Round off your FINAL ANSWERS into TWO
decimal places. Use continuous decimal during computation for uniformity of
final answers.
1. Assume that on January 1, 2020 Aldous invested Php 100,000 in a financing
company. Aldous would like to find out what would be the worth of his Php
100,000 after 5 years with an interest rate pegged at 8%.
2. Assume that on March 1, 2020 Floryn Company is to make annual investment of
Php 200,000 for four years. The interest for this investment was pegged at 9%.
The investment is made every year end. What is the future value of this annuity?
3. Pharsa wants to pay equal annual investment amounting to Php 200,000 for 3
years. The prevailing interest rate for this investment is 10%. How much is the
discounted value of the three-year payments to be recognized by Pharsa if the
first payment will be made at the start of the first year?
4. Assume that Popol promised to pay Php 100,000 per year in perpetuity, how
much is the PV of infinite Php 100,000 payments be worth if the interest rate is
10%? 15%? 20%?