John Randulf R.

Sena

BSA 1

MOI Unit 3 – L4 act

Exercises:

1. In return for a loan, a man promises to pay P12,500 at the end of each 6 months for 15 years. If
money is worth 12% compounded semiannually, find the cash value of the loan.

Given: j=12%, m=2, i=6%, R=12,500, t=15 years, n=30, A=?

−30
1−(1+0.06)
A=12,500 =P172,060.39
0.06

2. Based from problem 1, find the remaining liability just after he pays the 20 th installment.

Given : j=12%, m=2, i=6%, R=12,500, t=15years, n=20

20
[ ( 1+0.06 ) −1]
S ( 20 th ) =12,500 =P 459,818.89
0.06

30 20
S= A ( 1+0.06 ) =P 551,820.98
Cash Payment =S−S ( 20 th )=P551,820.98−P 459,819.89¿ P 92,001.09