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BUSANA1 Long Quiz 2 Reviewer

1. 65,000PhP is due at the end of 5 years at 14%, m = 2. If money is worth 17% compounded
quarterly, what is the value of the obligation
(a) now;
(b) at the end of 3 years and 3 months;
(c) at the end of 7 years and 6 months?
2. Which of the following obligations is the most valuable?
(a) 10,000PhP due today
(b) 9,500PhP due in 6 months with accumulated simple interest from today at 18%
(c) 10,500PhP due in 9 months with accumulated interest from today at 6%, m = 12.
Money is worth 14% compounded quarterly. Use end of 4 years as the comparison date.
3. Marissa borrowed 12,000PhP on January 26, 2007 and 18,000 on January 26, 2011. With
the agreement that money is worth 16% compounded semiannually, she paid 10,000PhP on
January 26, 2009 and would make a second payment on January 26, 2012 to discharge her
debts. How much is the second payment?
4. Sheila Marie deposited 35,000PhP 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?
5. Find the amount due at the end of 8 years if 35,000PhP is invested at 12% converted continuously for the first 4 years and 14% converted quarterly for the last 4 years.
6. A certain amount P is invested in a fund that earns interest at the rate of 15% compounded
continuously. If the amount in the fund after 4 years is 227,641.50, what present value P was
invested in the fund?
7. What rate compounded monthly is equivalent to 8.15% compounded continuously?
8. Linda deposits 10,000PhP at the end of every 3 months for 7 years in an account paying 4%
compounded quarterly. How much will she have in her account at the end of 7 years assuming
no withdrawal was made?
9. Mr. Enciso paid 500,000PhP as down payment for a piece of property in Tagaytay. The
remaining liability is to be settled by paying 50,000PhP at the end of each month for 3 years.
If money is worth 15% compounded monthly, find the cash price of the property.
10. In preparation for the college education of his son, Mr. Yanga will deposit 2,400PhP at the
end of each month for 5 years in a fund earning 4.5% compounded monthly. How much is in
the fund
(a) just after the 15th deposit
(b) just after the last deposit

11. A man will deposit a sum in a trust company just sufficient to provide his family 15,000PhP per
month for 15 years. How much does he deposit if the fund accumulates at 4 21 % compounded
12. In order to create a fund for the purchase of a brand new car, Frances will make equal monthly
deposits to a bank that pays 4% compounded monthly for 5 years. If she intends to buy a car
that will cost her 700,000PhP, how much should she deposit monthly to the bank?
13. A deposit of 3,000PhP is made at the end of each 3 months in a fund. At what interest rate
compounded quarterly does the fund accumulate if it contains 87,000PhP just after the 21st
14. A contract calls for a payment of 12,000PhP at the end of each year for 15 years. At what
interest rate compounded annually would this agreement be equivalent to a cash payment of
15. Anna deposits 1,000PhP every month in a fund earning 12% compounded monthly. If she
desires to accumulate 50,000PhP,
(a) how many monthly deposits of 1,000PhP must she make?
(b) how much will the final deposit be if it is to be made together with the last monthly
deposit of 1,000PhP?
(c) how much will the final deposit be if it is to be made one month after the last monthly
deposit of 1,000PhP?
16. A component is worth 15,000PhP. John pays 3,000PhP down and promises to pay 2,000PhP
every 3 months. If he is charged 10% interest quarterly,
(a) how many full quarterly payment of 2,000PhP must he make?
(b) how much will the final payment be if it is made 3 months after the last payment of
2,000PhP? When should this payment be made?

BUSANA1 Long Quiz 2 Reviewers Answers

1. (a) 55,620.71PhP
(b) 95,547.36PhP
(c) 193,870.52PhP
2. 10,000PhP due now (its value at the end of 4 years is 17,339.86PhP)
3. 31,033.56PhP
4. 67,166.95PhP
5. 98,078.77PhP
6. 124,932.30PhP
7. 8.18%
8. 321,290.97PhP
9. 1,942,363.37PhP
10. (a) 36,960.53PhP
(b) 161,149.33PhP
11. 1,960,801.52PhP
12. 10,558.23PhP
13. 12.46%
14. 6.31%
15. (a) 40
(b) 1,113.63PhP (i.e. total payment for the 40th month is 2,113.63PhP)
(c) 624.76PhP
16. (a) 6
(b) 1,169.37PhP at the end of 21 months