CHAPTER 6 – SUPPLEMENTARY PROBLEMS

P6-01
A debt of ₱10,000 with interest at the rate of 8%, payable semi-annually, is to be
amortized by equal payments at the end of each 6 months for 4 years. Find the semi-
annual pay sent and construct an amortization schedule.

P6-02
Construct the amortization schedule for a debt of ₱10,000 with interest at the rate of 19
% , payable semi-annually, which is paid for, principal and interest included, by
payments of ₱2,000 at the end of each 6 months for as long as necessary.

P6-03
A man borrowed ₱10,000 from a bank for home improvement, to be repaid by month-
end payments for 12 months. The current rate of interest charged by banks is 19%
compounded monthly. Based on this rate, prepare an amortization schedule.

P6-04
A corporation floats ₱200,000 worth of ten-year callable bonds in ₱1,000 denomination.
The bond rate is 7% compounded annually. Prepare an amortization schedule.

P6-05 (ECE Board, August 1975)

You purchased a ₱5,000 bond for ₱5,100. The bond pays ₱200 per year. It is
redeemable for ₱5,050 after 10 years. What is the net rate of interest on your
investment?

P6-06 (ECE Board, August 1979)

A ₱1,000 6% bond pays dividends semi-annually and will be redeemed at 110% on
July 1, 1975. It is bought on July 1, 1972 to yield (4%, m = 2). Find the price when it was
bought.

P6-07 (ECK Board, September 1982)

A ₱10,000 debt, in the form of ₱100 bonds, bears 4% interest payable annually.
Construct an amortization schedule for this issue by ten annual payments as nearly
equal as possible.

P6-08 (M.E. Board, March 1979)

A ₱1,000 bond which will mature in 10 years and with a bond rate of 8% payable
annually is to be redeemed at par at the end of this period. It is sold for ₱1,030.
Determine the yield at this price.

P6-09 (M.E. Board, October 1985)

A man was offered a Land Bank certificate with a face value of ₱100,000 which bears
interest of 8% per year payable semi-annually and due in 6 years. If the man wants to
earn 6% semi-annually, how much must he pay for the certificate?