MATWRLD PROBLEM SET 3

NAME/S: __________________________________________________________________________

INSTRUCTIONS: Do the following problems completely. IF solutions are needed, include them.
NO solutions, NO credit. Present your answers neatly. You may work alone or work with a
partner. If you work with a partner, BOTH of you should submit your work individually and
include both of your names in the submission.

HERE ARE YOUR OPTIONS:

(1) Download and print this document and then use pen/pencil to answer the problems. Then sign
each page before scanning them. Paste ALL the photos in a SINGLE document file and then save
as a PDF file.
(2) Download this document and then use an electronic device to WRITE solutions and answers.
DO NOT TYPESET. Save your work in PDF file format.

For each of the solutions, write the formula to be used and the substitution process.
1. Ryan has Php300,000 and wants to invest it for 2 years. The following are their options:
Option A: invest in an account that pays 4% simple interest rate
Option B: invest in an account that pays 4% interest rate compounded daily (m = 365)
Compute Ryan’s money after 2 years for each option. Assume that the earnings DO
NOT HAVE WITHHOLDING TAX. Show solution below: (8 points)
Option A solution: Option B solution:

Maturity Value: Maturity Value:

Interest Earned: Interest Earned:

What is your advice to Ryan? Justify your answer:

2. Sonia borrowed Php50,000 from Dencio and she promised to pay everything including
the interest after 3 years. How much should Sonia pay Dencio on the maturity date if
the interest rate is 6% compounded quarterly? (3 points)
3. Mark has a savings account. He is curious how the bank computes his monthly interest
earnings. The account pays an annual simple interest rate of 0.75%. Mark wants to
know how much interest his account earned in the month of May 2023. Here is the
account information: (7 points)
Date Amount No. of Days Product
May 1 Php75,032.56
May 17 Php90,338.27
May 27 Php82,431.69
ADB=

How much interest is earned for the month of May?

How much interest is earned for the month of May deducting the 20% withholding tax?

4. John invested Php50,000 in a time 5. Francis invested Php200,000 pesos in

deposit account that pays 0.75% per a government bond that pays 3.5%
year. How much interest is earned compounded monthly for 4 years.
AFTER DEDUCTION OF 20% How much interest is earned per
WITHHOLDING TAX? (4 points) month? (4 points)

6. Find the total stock ROI of a stock with
initial stock price = 96.27 and current
stock price = 98.35 with dividends per
share = 1.12. (3 points)
7. Ben bought 200 shares of stocks at
Php140 per share. A year later, he sold
the stocks at Php145.5 per share. How
much profit did he make on the sale?
(3 points)
 8. Suppose you invested Php1,000,000
with the Sun Rise Financial Balanced
Fund. Suppose also at the time you
made the investment, the NAVPS for
the fund was Php2.9834. How much
shares can you buy and what is the
value of these shares if you redeem
the investment when the NAVPS
reaches Php3.2758? (4 points)
9. A newly-married couple bought a
house and lot worth Php1,400,000
less down payment of Php280,000.
They promise to pay the balance in 15
years at 18% compounded quarterly.
How much is the quarterly payment?
(4 points)

10. A Php350,000 loan is to be paid every 6 months for 3 years with an interest rate of 8%
compounded semi-annually. Construct the amortization table. (10 points)

Solution for the semi-annual payment R:

R=

Period Periodic Interest Principal Outstanding

Payment R Payment Repayment Balance
0 ---- ---- ---- 350,000
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