General Mathematics

Seatwork: Deferred Annuity

Name:

Date:

Instruction: Solve the following problems with COMPLETE SOLUTION.

1. A man loans P 187,400 from a bank with interest at 5% compounded annually. He
agrees to pay his obligations by paying 8 equal annual payments, the first being
due at the end of 10 years. Find the annual payments. P 44,980.55
2. Find the present value of a deferred annuity of P 1,500 every 3 months for 8
years that is deferred 3 years if money is worth 6% converted or compounded
quarterly. P31,649.68
3. Find the period of deferral in each of the following deferred annuity problem.
a) Payments of P5,000 at the end of every 6 months for 15 years with the first
payment made 5 years from now. K=9
b) Payments of P3,000 every 2 years for 10 years starting at the end of 6 years.
K=2 years