Assessment Task 6

1. Find the amount and present value of an annuity of 440 payable every three months for 15 years and 3
months, if money is worth 5 ½% m=4]
Solution:
i = 1 3/8 %
n = 61

(1+ i)n−1
S=R [ i ]
(1+1 3/8)61−1
¿ 440 [ 1 3/8 ]
2.3002916−1
¿ 440 [ 1 3/8 ]
S = ₱ 41, 609.33

1−( 1+ i )−n
A=R [ i ]
1−(1+13 /8)−61
¿ 440 [ 1 3/8 ]
1+0.434727
¿ 440 [ 1 3/8 ]
A = ₱ 18, 088.72

2. Find the cash value of a sala set that can be bought for 2,500 down payment and 288 a month for 36
months if money is worth 3 ½% compounded semi-annually.
Solution:
i = 1 3/4 %
n=6

1−( 1+ i )−n
A=R [ i ]
1−( 1+13 / 4 )−6
¿ 288 [ 13 /4 ]
 1+ 0.901143
¿ 288 [ 1 3/4 ]
A = ₱ 1,626.91
Cash value = A + down payment
= 1,626.91 + 2,500
= ₱ 4,126.91

3. A fund is to create by investing 900 at the end of every month for 9 years. IF money is worth 9%
compounded monthly, how much is in the fund at the end of the term?
Solution:
i = 3/4 %
n = 108

(1+ i)n−1
S=R [ i ]
(1+3 / 4)108 −1
¿ 900 [
3/4 ]
2.241124−1
¿ 900 [ 3 /4 ]
S = ₱ 148,934.90

4. If money is worth 5% compounded quarterly, how much must Cristina save every end of three months
to have 20,000 at the end of 15 years?
Solution:
i = 1 1/4 %
n = 60

S
Rs=
[ ] ( 1+i )n−1
i

20,000
¿
[ ( 1+1 1 ⁄ 4 )60−1
11 ⁄ 4 ]
 20,000
¿
[ 1.10718135
11 ⁄ 4 ]
Rs = ₱ 225.80

5. How much must be paid every end of 6 months for 14 years to liquidate an obligation of 25,400 if
money is worth 5 ½% compounded semi-annually
Solution:
i = 2 3/4 %
n = 28

S
Rs=
[ ]
( 1+i )n−1
i

25,400
¿
[ ( 1+2 3 ⁄ 4 )28−1
23 ⁄ 4 ]
25,400
¿
[ 1.13742682
23 ⁄ 4 ]
Rs = ₱ 614.11

6. How much must be paid for 48 months to settle an obligation of 13,800 if money is worth 3%
converted monthly
Solution:
i = 1/4 %
n = 48

S
Rs=
[ ]
( 1+i )n−1
i

13,800
¿
[ ( 1+1 ⁄ 4 )48−1
11 ⁄ 4 ]
 13,800
¿
[ 1.10718135
11 ⁄ 4 ]
Rs = ₱ 270.95

10. The present value of an annuity is 16,950. Quarterly payments of 369 are made from 16,950 that is
invested at 4% compounded quarterly. How many regular payments will be made and what is the size of
the concluding payment?
Solution:
i = 1%
−1
PV ( i )
n=ln 1−
Rs [( ) ] ÷ ln(1+i)

−1
16,950 (1 )
¿ ln 1− [( 369 ) ] ÷ ln (1+1)

n = 61.805 or 62

Size of concluding payment = 297.41

11. A man deposits 320 at the end of each three months in an account paying 6% converted quarterly. In
order to accumulate 9,400, how many regular deposits every three months must he make and what is the
size of the concluding payments if one is needed?
Solution:
i = 1 1/2%
−1
FV ( i )
n=ln 1−
Rs [( ) ] ÷ ln (1+i)

−1
9400 ( 11 /2 )
¿ ln 1− [( 320 ) ] ÷ ln( 1+ 11/2)

n = 24.521 or 25

Concluding payment = periodic payment x length of last period

= 320 x 0.52
Concluding payment = 153.42
12. An item is for sale for 7,800, Mr. Bing can pay 2,200 down payment and 240 every end of the month.
IF he gets the loan at 7% compounded monthly, how many regular payments of 240 must he make and
what will be the size of the concluding payment
Solution:
i = 7/12 %
−1
PV ( i )
n=ln 1− [( Rs ) ] ÷ ln (1+i)

−1
5,600 ( 7/12 )
[(
¿ ln 1−
240 ) ] ÷ ln(1+7 /12)

n = 25.154 or 26

Concluding payment = payment x (n – 25)

= 240 x (25.154 – 25)
Concluding payment = 37.20

13. Find the amount and present value of an annuity due of 125 every quarter for 9 years and 6 months, if
money is worth 5% converted quarterly.
Solution:
i = 1 1/4
n = 38

(1+ i)n−1
S=R [ i ]
(1+1 1/4)38−1
¿ 125 [ 1 1/4 ]
1.603287−1
¿ 125 [ 11/4 ]
S = ₱ P6,032.87

1−( 1+ i )−n
A=R [
i ]
1−(1+1 1/4)−38
¿ 125 [ 11/ 4 ]
 1−0.623719
¿ 125 [ 11/4 ]
A = ₱ 3,762.81