Quiz 1: Interest (50 points)

1. Find the (a) exact and (b) approximate time of the following:

a. August 10, 2015 to March 26,2016.

b. January 28, 2020 to March 14, 2021.

c. June 28,2020 to April 2, 2021

2. On January 15,2021, Henry Lau borrowed P8,000 and agreed to repay the loan in 60 days. The
interest rate is 12%. Answer the following questions:

a. How much is the interest?

b. What amount must he repay?

c. On what date?

3. On February 2,2021, Kim issued a 6-month, 8% promissory note amounting to P120,000 to Sam.
After 2 months, find the maturity and proceeds of the discounting.

4. Bobby signs a 150-day note for P15,000 from a bank that charges 5% interest in advance. What is
the value that he receives from the bank?

5. The proceeds of a 60-day loan are P450 and the borrows P456 at the end of 60 days. Find the rate
at which he pays (a) interest (b) discount.

Performance Task 3: Amortization and Sinking Fund

1. Arthur obtained a loan for the tuition for his daughter. The loan is being discharged, principal and
interest at 12% payable annually, by paying P7,500 at the end of each six months for 10 years. Find
how much of his 12th payment is interest and how much is the repayment of the principal. Prepare
an amortization table. (50 points)

2. In discharging a loan, Kevin foresees the necessity of paying P200,000 at the end of 5 years. To
provide this money, he will create a sinking fund by investing equal deposits at the end of each three
months at 24% compounded quarterly. Find the quarterly deposit. Prepare a sinking fund schedule.
(50 points)

Written Work 4: Depreciation

1. YG Corporation purchases an office equipment to be used in the manufacturing operations for

$550,000. The salvage value of the equipment is $55,000 with the useful life of 6 years. Use the
straight-line method to find:

a. The annual depreciation

b. The total depreciation

c. The book value at the end of 4 th year.

 d. The accumulated depreciation at the end of 6 years

e. Construct a depreciation table

2. A computer unit that was bought at P125,000 has an estimated useful life of 4 years and a trade-in
value of P10,000. Use the following the methods to find the depreciation charge for year and
construct depreciation schedule for: Sum of the Years’ Digit and Double Declining Balance Method.

3. The cost of equipment purchased by the Ramsay Company is $135,000. It is estimated that the
machine will have a $25,000 scrap value at the end of its useful life which is estimated at 37,500
units and that the actual number of units produced in the production for each year is as follows:

1st year:8,750

2nd year: 12,250

3rd year: 10,500

4th year: 6,000

Using the Units-of-Production-Method;

a. Find the depreciation charge per year

b. Construct the depreciation schedule.

Written work 4: Annuity, Amortization and Sinking Fund

1. Misa borrows P300,000 to buy a car. The debt with interest at 12% compounded quarterly will be
settled at the end 3 months for 10 years.

a. Find the size of each payment.

b. Find the remaining liability just after 28 th payment.

c. Construct the amortization table.

2. Jinu wants to have P1,500,000 in 7 years to buy real estate. He plans to make a sinking fund by
depositing an amount every 6 months. If the funds earn 18% semi-annually.

a. Find the semi-annual payments.

b. Construct a sinking fund schedule.

3. Clara wants to create a fund today that will enable her to withdraw P288,000 per year for 15
years, with the first withdrawal to take place 5 years from now. If money is worth 12% compounded
annually, how much Clara invest today?

4. A television set is offered for sale for p57,600 or P10,000 cash and a sequence of 12 monthly
payments of P5,000, the first due at the end of 7 months. If money is worth 24% compounded
monthly, which purchase is better? Provide a solution.
Written Work No 6 for remedial class
Topic: Bonds and Stocks
A. A P70,000 bond is redeemable at 110%, pays interest at 15% compounded
semiannually to yield the buyer 13.5% compounded semiannually for 4 years. Find
the coupon payment, redemption value, purchase price and bond premium.
Construct the amortization of payments.

B. Paul bought 1,200 shares of Tueland Corporation’s common stock at the unit
price of P36.25. Later, Paul sold 450 shares of his stock above the unit price of
P50.75. His broker’s commission charges are listed below:
Peso Range per Table (P) Commission Rates (P)
0 – 2,500 24 + 0.2% (of principal amount)
2,500 – 6,000 34 + 0.3%
6,000 – 22,000 44 + 0.35%
22,000 – 50,000 54 + 0.4%
50,000 – 100,000 64 + 0.45%
100,000 and up 74 + 0.5%

Required:
Commission Charge on Purchase
Total Cost of the Shares
Commission charge on Sale
Net profit on Sale