UNIVERSITY OF

PERPETUAL HELP
SYSTEM DALTA
Quiz 1
Business Finance

Name: _Srabon, MD Shariar R._________ Teacher: __Ms. Glennys Madarang________

Grade & Section: _12-ABM3___________ Subject: __Business Finance _____________

Direction: Compute for the present value of each scenario using the Present value interest factor
for an ordinary annuity (PVIFA) table. Please include the solution. Total points. 10 points

1. John availed a car loan payable in 5 equal installments of Php 200,000 at the end of the
next 5 years with an annual rate of 15%. (5points)

1 1
Present Value of an Annuity = C × −
R R (1+ R)T

1 1
= Php 200,000 × −
0.15 0.15(1+0.15)5

= Php 200,000 × 3.3522

= Php 200,000 × 3.3522

= Php 670,440

Therefore, the present value of an annuity is Php 670,440

2. Gem borrowed from her sister to buy an electric scooter. Her sister charged 11% for the
borrowed amount payable in three annual payments of Php 3,000. (5points)

1 1
Present Value of an Annuity = C × −
R R (1+ R)T

1 1
= Php 3,000 × −
0 .11 0.1 1(1+0.1 1)3

= Php 3,000 × 2.4437

= Php 7,331.1
Therefore, the present value of an annuity is Php 7,331.1

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