Solving for time t given the Present Value A

Solving for time t given the Amount S

Example 3.13

1. Sebastian dreams of buying a car worth P990,855. He wonders when he would be able to buy it if he
saves money. If he can only deposit P45,000 at the end of every 3 months in a fund that pays 4%
compounded quarterly, when would he be able to buy his dream car?

Given: S = P990,855; R = P45,000; j = 0.04; m = 4;

Req: t
Solution: Solve for i; i= j/m 0.04/4 = 0.01

Answer: It would take 5

years for Sebastian to
buy his dream car
worth P990,855.

t=5
Example 3.15

2. How long will it take to discharge a loan of P400,00 at 10% compounded

semiannually if payment of P78,806.99 is required at the end of every 6 months?

Given: A = P400,000; R = P78,806.99; j = 0.10; m = 2;

Req: t
Solution: Solve for i; i= j/m 0.10/2 = 0.05

Answer: It will take 3

years to discharge a debt
of P400,000.
t=3
Solving for Rate j
 Example 3.17

If deposits of P500 made at the end of each month for 4 years

accumulate to P25,465.60, find the rate at which money accumulates
monthly.

Given: S = P25,465.60; R = P500; t = 4; m = 12; n = 48

Required: j
Solution:
Example 3.9

If deposits of P500 made at the end of each month for 4 years

accumulate to P25,465.60, find the rate at which money accumulates
monthly.

Given: S = P25,465.60; R = P500; t = 4; m =

12; n = 48
Required: j
Solution:

Two values of i are obtained in the preceding
computation. One of these is extraneous. To determine
which one is correct, verify by finding the value of S.
When i is 0.0025
When i is 0.12
Example 3.9
If deposits of P500 made at the end of
each month for 4 years accumulate to
P25,465.60, find the rate at which money
accumulates monthly.
Given: S = P25,465.60; R = P500; t = 4; m =
12; n = 48; Required: j
= 25, 465.60 is the required amount.
Hence, i = 0.0025.

Lastly, solve for j using the correct value of i.

j = im = (0.0025)(12) = 0.03 or 3%

Answer: The rate at which the given amount of

money accumulates monthly is 3%.
 Example 3.18

At what interest rate payable quarterly will payments of P6,000 at the

end of every 3 months for 2 years and 3 months, discharge a loan of
P50,000, principal and interest included?

Given: A = P50,000; R = P6,000; t = 2.25; m = 4;

Required: j
Solution: Solving for n is (2.25)(4) = 9. Now find i so we can solve for j
Example 3.18

At what interest rate payable quarterly will payments of P6,000 at the

end of every 3 months for 2 years and 3 months, discharge a loan of
P50,000, principal and interest included?

Given: A = P50,000; R = P6,000; t = 2.25; m = 4;

Required: j
Solution: Solving for n is (2.25)(4)=9. Now find i so we can solve for j
Now, find the two possible values of i.

In this problem, two values of i are

obtained. One is positive and one is
negative. Obviously, the correct answer
is the positive value of i since, in reality,
there is no negative interest rate.
To solve for j, use the equation j = mi.

j = (4)(0.0157) = 0.0628 or 6.28% Answer: The loan will be discharged at

an interest rate of 6.28% compounded
quarterly.
End of Presentation

“Great works are performed not by

strength but by perseverance”- Samuel
Jhonson