BM2.MOD2 in Class Problems 12152010

BMAT2-X
Module 2 In-class Problems
1. Find the compound interest due in 7 years and 8 months if Php20,000 is invested at 15%
compounded monthly.
2. Accumulate Php30,000 for 5 years at 11% compounded semi-annually.
3. Jerry borrows Php700,000 and promises to pay the principal and interest at 24% compounded
monthly. Nine years later, how much must he repay?
4. Discount Php163,000 for 2 years and 6 months at 10% compounded semi-annually.
5. How much must a 15-year old boy deposit in a bank that pays 11% compounded quarterly so
that after 10 years he will have Php100,000?
6. A computer was bought on installments – Php15,000 downpayment and the balance of
Php18,000 in 2 years. What is its cash price if the interest rate is 20% compounded quarterly?
7. Find the compound amount if Php68,000 is invested at 12% compounded quarterly for 4 years
and 5 months.
8. On May 19, 2010, a man borrowed Php80,000. He agreed to pay the principal and the interest
at 16% compounded semi-annually on July 19, 2016. How much will he pay then?
9. Find the present value of Php14,000 due in 3 years and 8 months if money is worth 10%
compounded semi-annually.
10. A debt of Php25,000 is due in 2 years and 7 months. If the debtor wishes to pay his creditor
now who uses 12% compounded semi-annually in discounting the debt, how much would he
have to pay?
11. At what rate converted quarterly will Php20,000 grow to Php26,000 in 9 years?
12. If Php25,000 earned an interest of Php3,000 in 2 years, at what rate compounded annually
was the money invested?
13. A father plans to invest Php250,000 on his son's birth for his son's education 5 years later. If he
wishes to have Php500,000 by that time, at what rate converted quarterly should he invest
his money?
14. How long will it take for Php5,000 to accumulate to Php20,000 at 12% compounded semi-
annually?
15. When will Php30,000 earn interest of Php15,000 if it is invested at the rate of 7 ½% converted
annually?
16. Find the accumulated value of Php9,000 at the end of 5 years if it is invested at 9% converted
continuously.
17. Find the present value of Php130,000 due in 9 years at 12% converted continuously.
18. What rate compounded quarterly is equivalent to 12% compounded semi-annually?
19. Find the rate compounded semi-annually that is equivalent to 15% compounded monthly.
20. What nominal rate converted monthly is equivalent to 8% effective rate?
21. Which is better: to deposit in a savings account that earns at 5% compounded quarterly or in
bonds that pay 5.5% effective rate?
22. Bank A offers 6% (m = 4) on savings account while Bank B offers 6 ½% (m = 2). If you are a
depositor, in which bank would you prefer to put your money?
23. Sonia owes Php20,000 due in 2 years and Php60,000 due in 5 years. What single payment on
the 4th year will settle her debts? Money is worth 10% compounded semi-annually.
24. If money is worth 7.5% effective rate, what single payment at the end of 5 years would
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replace the following debts?
a) Php9,000 due in 1 year without interest
b) Php10,000 due in 9 years with accumulated interest from today at 14% (m = 2)
25. I owe Howard Php50,000 due in 4 ½ years. On the 3rd year, I pay Php30,000. If money is
worth 9% compounded semi-annually, how much would I have to pay on the 6th year to
discharge the rest of my obligation?
26. If money is worth 9% effective, what single payment in 4 years will discharge these
obligations:
a) Php65,000 due today
b) Php50,000 due in 5 years
27. Sonny owes Jeffrey the following debts:
a) Php50,000 due in 1 year
b) Php70,000 due in 9 months with accumulated simple interest from today at 9%
c) Php40,000 due in 18 months with accumulated interest from today at 15% (m = 2)
Sonny wishes to replace these debts with two equal payments at the end of 10 months
and 2 years, respectively. Find how much each payment is if money is worth 12%
compounded monthly.
28. In return for debts of Php50,000 at the end of 4 years and Php85,000 at the end of 10 years, a
man agrees to pay Php10,000 at once and Php30,000 at the end of 6 years, and to make
another payment at the end of 12 years. Find the payment at the end of 12 years if money is
worth 18% compounded semi-annually.
29. Php200,000 is invested for 10 years in a savings bank that gives 9% compounded quarterly in
the first 6 years and 10% compounded quarterly in the last 4 years. What is the amount at the
end of 10 years?
30. Find the amount at the end of 15 years if Php8,000 is invested at an interest rate of 10%
converted quarterly in the first 5 years, 9% converted semi-annually in the second 5 years,
and 8% effective in the last 5 years.
31. Mrs. Kelly deposited Php350,000 in a savings account earning 5% effective. Five years later,
the rate was raised to 6% effective. How much will she have in her account 7 years after the
rate change?
32. Find the accumulated value of Php8,700 at the end of 10 years if it earns effective interest of
7% in the first 3 years and 10% converted continuously in the remaining years.
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BMAT2-X

Module 2 In-class Problems

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