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    Mathematics of Investments - Special Annuities

    Uploaded by

    Brando Molo
    1. To save Php150,000 over 5 years with quarterly deposits earning 11% compounded quarterly requires deposits of Php5,572.52 each quarter. 2. A Php20,136.39 loan bearing 9% interest compounded bimonthly and repaid with 15 payments of Php1,700 had a deferral period of 8 months between the date of the loan and first payment. 3. A savings account with Php70,000 earning 6% compounded quarterly can sustain quarterly withdrawals of Php6,500 for approximately 2.91 years. 4. The cash value equivalent of 5 years of monthly rent of Php9

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    Mathematics of Investments - Special Annuities

    Uploaded by

    Brando Molo
    122 views3 pages
    1. To save Php150,000 over 5 years with quarterly deposits earning 11% compounded quarterly requires deposits of Php5,572.52 each quarter. 2. A Php20,136.39 loan bearing 9% interest compounded bimonthly and repaid with 15 payments of Php1,700 had a deferral period of 8 months between the date of the loan and first payment. 3. A savings account with Php70,000 earning 6% compounded quarterly can sustain quarterly withdrawals of Php6,500 for approximately 2.91 years. 4. The cash value equivalent of 5 years of monthly rent of Php9

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    1. To save Php150,000 over 5 years with quarterly deposits earning 11% compounded quarterly requires deposits of Php5,572.52 each quarter. 2. A Php20,136.39 loan bearing 9% interest compounded bimonthly and repaid with 15 payments of Php1,700 had a deferral period of 8 months between the date of the loan and first payment. 3. A savings account with Php70,000 earning 6% compounded quarterly can sustain quarterly withdrawals of Php6,500 for approximately 2.91 years. 4. The cash value equivalent of 5 years of monthly rent of Php9

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    122 views3 pages

    Mathematics of Investments - Special Annuities

    Uploaded by

    Brando Molo
    1. To save Php150,000 over 5 years with quarterly deposits earning 11% compounded quarterly requires deposits of Php5,572.52 each quarter. 2. A Php20,136.39 loan bearing 9% interest compounded bimonthly and repaid with 15 payments of Php1,700 had a deferral period of 8 months between the date of the loan and first payment. 3. A savings account with Php70,000 earning 6% compounded quarterly can sustain quarterly withdrawals of Php6,500 for approximately 2.91 years. 4. The cash value equivalent of 5 years of monthly rent of Php9

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    1.

    A fund of Php150,000 will be saved by depositing equal payments at the


    beginning of each 3 months for 5 years at 11% compounded quarterly. How
    much will be deposited at the beginning of each period?
    Given:
    𝑗
    𝐹𝑉𝑑𝑢𝑒 ( )
    𝑚
    𝐹𝑉𝑑𝑢𝑒 = 150,000 𝑅= 𝑗 𝑚𝑡+1 𝑗
    (1+ ) −(1+ )
    𝑚 𝑚

    0.11
    150,000( )
    4
    𝑡=5 𝑅= 0.11 (4)(5)+1 0.11
    (1+ ) −(1+ )
    4 4

    𝑚=4 𝑹 = 𝟓, 𝟓𝟕𝟐. 𝟓𝟏𝟓𝟒𝟏𝟕


    𝑗 = 11% 𝑜𝑟 0.11
    𝑅 =?

    2. A Php20,136.39 loan bearing interest at 9% compounded bimonthly was


    repaid, after a period of deferral, by 15 bimonthly payments of Php1,700. What
    was the time interval between the date of the loan and the first payment?
    Given:
    𝑗 −𝑚𝑡
    1−(1+ )
    𝑚
    log{𝑅[ 𝑗 ]}
    𝑃𝑉𝑑𝑒𝑓 ( )
    𝑚
    𝑃𝑉𝑑𝑒𝑓 = 20,136.39 𝑑= 𝑗
    log(1+ )
    𝑚

    0.09 −15)
    1−(1+ )
    log{1,700[ 6
    0.09 ]}
    20,136.39( )
    6
    𝑗 = 9% 𝑜𝑟 0.09 𝑑= 0.09
    log(1+ 6 )

    𝑚=6 𝒅 = 𝟖. 𝟎𝟎𝟎𝟎𝟎𝟔
    𝑅 = 1,700
    𝑚𝑡 = 15
    𝑑 =?
    3. How long can a savings account sustain quarterly withdrawals of Php6,500
    beginning today if the savings account contains Php70,000 and earn 6%
    compounded quarterly?
    Given:
    𝑗
    (𝑃𝑉𝑑𝑢𝑒−𝑅 )(𝑚)
    log[1− ]
    𝑅
    𝑚=4 𝑛 =1− 𝑗
    log(1+ )
    𝑚

    0.06
    (70,000−6,500)( )
    log[1− 4 ]
    6,500
    𝑅 = 6,500 𝑛 =1− 0.06
    log(1+ 4 )

    𝑃𝑉𝑑𝑢𝑒 = 70,000 𝒏 = 𝟏𝟏. 𝟔𝟒𝟐𝟔𝟖𝟒𝟐𝟏 𝒒𝒖𝒂𝒓𝒕𝒆𝒓𝒔


    𝟏𝟏.𝟔𝟒𝟐𝟔𝟖𝟒𝟐𝟏
    𝑗 = 6% 𝑜𝑟 0.06 𝒕=
    𝟒

    𝑡 =? 𝒕 = 𝟐. 𝟗𝟏𝟎𝟔𝟕𝟏𝟎𝟓𝟐 𝒚𝒆𝒂𝒓𝒔

    4. The monthly rent of a house is Php9,000 payable at the beginning of every


    two months. If money is worth 10% compounded bimonthly, what is the cash
    value equivalent of 5 years rent?
    Given:
    𝑗 𝑚𝑡+1
    (1+ ) −1
    𝑚
    𝑅 = 9,000 𝐹𝑉𝑑𝑒𝑓 = 𝑅 [ 𝑗 − 1]
    𝑚

    0.10 (6)(5)+1
    (1+ ) −1
    6
    𝑗 = 10% 𝑜𝑟 0.10 𝐹𝑉𝑑𝑒𝑓 = 9,000 [ 0.10 − 1]
    6

    𝑚=6 𝑭𝑽𝒅𝒆𝒇 = 𝟑𝟓𝟐, 𝟒𝟐𝟓. 𝟓𝟗𝟎𝟗

    𝑡=5
    𝐹𝑉𝑑𝑢𝑒 = ?
    5. Find the present value of 16 monthly payments of Php1,100 each if the first
    payment is done 1 year and 1 month and money is worth 13% compounded
    monthly.
    Given:
    𝑚𝑡 = 16
    𝑅 = 1,100
    𝑚 = 12
    𝑗 = 13% 𝑜𝑟 0.13
    𝑑 = (1.0833334 𝑥 12) − 1 𝑚𝑜𝑛𝑡ℎ = 12.0000008
    𝑃𝑉𝑑𝑒𝑓 = ?

    𝑗 −𝑑 𝑗 −(𝑚𝑡+𝑑)
    (1+ ) −(1+ )
    𝑚 𝑚
    𝑃𝑉𝑑𝑒𝑓 = 𝑅 [ 𝑗 ]
    𝑚

    0.13 −12.0000008 0.13 −(16+12.0000008)


    (1+ ) −(1+ )
    12 12
    𝑃𝑉𝑑𝑒𝑓 = 1,100 [ 0.13 ]
    12

    𝑷𝑽𝒅𝒆𝒇 = 𝟏𝟒𝟏𝟐𝟗. 𝟏𝟗𝟒𝟐𝟖

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