1. A man made a year-end payment of 100,000 to an account earning 8% annually for 10 years.

How much is in the account after 20 years?

2. P1,000,000 was invested to an account earning 8% compounded continuously. What is the

amount after 20 years?

3. Find the effective rate on a nominal rate of 8.5% compounded continuously.

4. A house and lot costing P2 million was bought at a down payment of 500,000 and 1 million after
1 year. The remaining balance will be paid at the end of the third year. If the interest rate is 24%
compounded semi-annually, what is the required payment?

5. A man deposit P6,000 every end of three months for his retirement. If the interest rate is 10%
annually compounded quarterly, what lump sum value can he expect after 20 years?

6. What is the difference between the sums of an annuity due and an ordinary annuity for the
following data:
Periodic payment = 14,000
Term
= 16 years
Interest rate
= 10% compounded quarterly
Payment interval = 3 months

7. Terms of sale: P60,000 payable in 60 days or 57,500 payable in 15 days. Find the equivalent
annual rate of simple interest if paid in 60 days.

8. Find the present value of an annuity of 20,000 payable annually for 8 years, with the first
payment at the end of 10 years. If money is worth 5%

9. The present value of an annuity of R pesos payable annually for 10 years, with the first payment
at the end of 10 years is P100,701.30. If money is worth 8%, what is the value of R?

10. An investment of P2,500 is made at the end of each year with interest of 2.5% compounded
annually
A. Determine the total amount of the investment after 8 years.
B. How long ( in years) will it take for the investment to amount to P59,865.00?

11. If money is worth 8% annually, what annual payment is required to raise P350,000 after 12
years?

12. An engineer borrowed a sum of money under the following terms: P650,000 if paid in 90 days
or P600,000 if paid in 30 days. What is the equivalent annual rate of simple interest?

13. The purchase of a new car requires P100,000 down payments, P300,000 after two years, and
P600,000 after five years. The interest rate is 18% compounded monthly.
A. What is the present worth of car?
B. What is the lump sum value of the car if paid after 5 years?
C. With a down payment of P100,000 and monthly interest of 1.5%, what is the monthly
amortization of the car for 5 years?

14. Miss Calledo deposit P1,000 ,P1,500 and P2,000 at the end of the 2nd year, 3rd year, and 4th
year, respectively in a savings account which earned 10% per annum. How much is in the account
at the end of the 4th year?

15. A man borrowed P200,000 from his friend and agreed to pay after 6 years at an interest rate of
10% per annum. How much should the man deposit in a bank in order to discharge his debt, if the
bank offers 6% annual interest rate?

16. The average annual cost of damages caused by floods to a certain subdivision located along
Pasig River is estimated at P5M. To build gravity dam to protect the area from floods would cost
P25M and would involve an annual maintenance cost of P2M. Interest rate is 11%.
A. What is the present worth of all the damages for 15 years?
B. What is the capitalized cost of the dam?

C. How many years will it take for the dam to pay for itself?

17. A P1,000, 6% bond pays dividend semi annually and will be redeemed at 110% on June 21,
2004. It is bought on June 21, 2001 to yield 4% interest. Find the price of the bond.

18. A machine cost P8,000 and an estimated life of 10 years with a salvage value of P500. What is
the book value after 8 years using straight line method?

19. An asset is purchased for P9,000.00. Its estimated economic life is 10 years after which it will
be sold for P1,000. Find the depreciation in the first three years using sum-of-years digit method.