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Annuity Problem Solution

Mr. Reyes borrows P600,000 at 12% interest with 15 annual payments, leaving an unpaid balance of P402,042 after 8 payments. A piece of equipment can be financed with a down payment and yearly installments, resulting in an annual interest rate of 15.05%. The document also discusses the present worth of annuities, loan calculations, and future investment values, providing various financial outcomes based on the given scenarios.

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18 views2 pages

Annuity Problem Solution

Mr. Reyes borrows P600,000 at 12% interest with 15 annual payments, leaving an unpaid balance of P402,042 after 8 payments. A piece of equipment can be financed with a down payment and yearly installments, resulting in an annual interest rate of 15.05%. The document also discusses the present worth of annuities, loan calculations, and future investment values, providing various financial outcomes based on the given scenarios.

Uploaded by

louxliyx
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1. Mr.

Reyes borrows P600,000 at 12% compounded annually agreeing to repay the loan in 15 equal
annual payments. How much of the original principal is still unpaid after he has made the 8th
payment? Ans. P 402,042

−15
1−(1+0.12)
600,000 = A( )
0.12
A=P88094.54

LET Q = REMAINING BALANCE IN THE 8TH YEAR


−8
1−(1+0.12)
600,000(1+0.12)8=88094.54( ¿(1+0.12)8+ ¿Q
0.12
Q=P402,042

2. A piece of equipment can be bought for P100,000 cash or for P30,000 down and a yearly payment
of P12,000 for 15 years. What is the annual interest rate for the time payments?
Ans. 15.05%

3. What is the difference between the present worth of annuity due and ordinary annuity having the
following data.
Annual payment = P 12,000
Number of years = 6 years
Interest rate = 12% compounded annually
Ans. P 5,920
4. A loan of x pesos will be paid in 48 equal monthly payments, the first period of payment will start
after 6 months from from the release of the loan. The required monthly payment is P5,782. Interest
rate is 18 percent compounded monthly, What is the value of x? P180,000

5. To prepare for his son’s college education, a man plans to make monthly deposits of P2,000 for 60
months, starting today. Interest rate is 12% compounded monthly. a. What
will be the total amount accumulated after the last deposit. [Link] is
the present worth of his investments? [Link] monthly
withdrawals can he make in one year starting at the end of the first month after 15 years from now?
Ans. P 163,339.339, P 90,809.18 , P48,375.84

−59
1−(1+0.01)
P = 2000+2000 = P90809.18
0.01
F = 90809.18(1+0.01)59 = P163339.34

−12
1−(1+0.01)
90,809.18(1+0.01)180=A
0.01
A = P48375.84

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