Exercises: (CALAQUE, DARIO JR.

A)
1. On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded
annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year,
and the remaining balance at the end of the third year. How much does he withdraw at the
end of the third year? ₱𝟏𝟎𝟔𝟗. 𝟏𝟗
2. What amount of money is equivalent to receiving ₱5,000 two years from today, if interest
is compounded quarterly at the rate of 2.5% per quarter? ₱𝟒𝟏𝟎𝟑. 𝟕𝟑
3. On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded
annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year,
and the remaining balance at the end of the third year. How much better off, in terms of net
cash flow, would he have been if he had not made the withdrawals at the ends of years one
and two? ₱𝟐𝟎. 𝟓𝟏
4. A person lends ₱2,000 for five years at 10% per annum simple interest; then the entire
proceeds are invested for 10 years at 9% per year, compounded annually. How much money
will the person have at the end of the entire 15-year period? ₱𝟕𝟏𝟎𝟐. 𝟎𝟗
5. On the first day of the year, a man deposits ₱1,000 in a bank at 8% per year compounded
annually. He withdraws ₱80 at the end of the first year, ₱90 at the end of the second year,
and the remaining balance at the end of the third year. What is the net cash flow? ₱𝟐𝟑𝟗. 𝟏𝟗
6. How many years will it take for an investment to double, if the interest rate is 8% per year,
compounded annually? 9years
7. How much money will be required four years from today to repay a ₱2,000 loan that is
made today at 8% interest compounded annually? ₱2720.97
8. How much money will be required four years from today to repay a ₱2,000 loan that is
made today at 8% simple interest? ₱2640.00
9. At what rate of interest, compounded annually will an investment triple itself in 8 years?
14.7%
10. If ₱300 is earned in three months on an investment of₱12,000, what is the annual rate
of simple interest? 10%