23,504.

32=x

Therefore, the single payment to be paid on the third year to cover the existing obligations of
Clarissa at 12% compounded quarterly is P23,504.32.

1. Mera Challa has the following obligations:

a) P8,000 due at the end of one year at 9% compounded quarterly,

b) P15,000 due at the end of 5 years at 11% compounded monthly; and
c) P7,500 due at the end of 4 years at 8% compounded semi-annually.

To pay her obligations, she paid P12,500 at the end of 3 years and promised to make equal payments at
the end of the 2nd year and 4.5th year. What is the size of the payment if money is worth 12%
compounded quarterly?

Solution:

Given: P1 = 8,000 F1 = ? t 1 = 1 years j 1 = 9% m1 = 4

P2 = 15,000 F2 = ? t 2 = 5 years j 2 = 11% m 2 = 12
P3 = 7,500 F3 = ? t 3 = 4 years j 3 = 8% m3 = 2

a) F 1=P1 (1+ i)n

¿ 8,000(1+.0225)4
¿ 8744.67

b) F 2=P2 (1+i)n
¿ 15,000(1+.00916)60
¿ 25,933.74
c) F 3=P3 (1+i)n
¿ 7,500(1+.04)8
¿ 10,264.27

To determine the equal single payments to be made on the 2 nd year and 4.5th year at 12% compounded
quarterly, we can use the second year as the comparison date.

P8,744.67 P10,624.27 P25,933.74

0 1 2 3 4 5
X P12,500 x
Use as comparison date

Expressing the equation of value, we have the following:

8,744.67(1+.03)4 +10,264.27 (1+.03)−8+ 25,933.74(1+.03)−12=x +12,500(1+.03)4 + x (1+.03)−10
9,842.20+8,102.71+18,189.40=x+11,106.09 +.744 x