Origination of Formula: R PV X I 1 - (1+i) : FM MIDTERM QUIZ With Answers
Origination of Formula: R PV X I 1 - (1+i) : FM MIDTERM QUIZ With Answers
Origination of Formula: R PV X I 1 - (1+i) : FM MIDTERM QUIZ With Answers
1. Luffy invested his P1,000,000 retirement pay at 8% compounded monthly. How much
will he or his heirs receive a monthly pension at the end of each month for the next 10
years?
R= payments
PV= 1,000,000
Origination of formula:
Apply cross multiplication then derive formula:
R= PV x i
1-(1+i)-n
R= 1,000,000 x (0.08/12)
1-(1+(0.08/12)-(10 x 12)
R= 6,666.66666
0.54947653934
R= 12, 132.76
2. Luffy buys a car and pays 200,000 cash and a condition to pay 15,000 at the end of each
month for 2 years to pay all the principal and interest at the rate of 6% compounded
monthly. How much is the cash price of the car?
Cash price= PV of payment + Cash paid
4. Luffy buys a car and pays 200,000 cash and a condition to pay 15,000 at the end of each
month for 2 years to pay all the principal and interest at the rate of 6% compounded
monthly. How much is the interest accrued at the end of the 7th installment?
2 years x 12 months= 24 Total installments/periods (n)
Interest accrued at the end of the 7th installment= 455.66
5. Luffy buys a car and pays 200,000 cash and a condition to pay 15,000 at the end of each
month for 2 years to pay all the principal and interest at the rate of 6% compounded
monthly. How much is his remaining liability if the covenant is revised to pay 15,000 at
the end of each quarter at the end of the 3rd installment?
7. On March 2000, a company agreed to pay Mr. Luffy the amount of 500 at the end of
each month for 8 years. No payment was made until March 1,2010. How much should
be paid by the company if Mr.Luffy charges 5% compounded fortnightly from 2000 to
March 1,2007?
FVoa= 108,833.57
8. On March 2000, a company agreed to pay Mr. Luffy the amount of 500 at the end of
each month for 8 years. No payment was made until March 1,2010. How much should
be paid by the company if Mr.Luffy charges 5% compounded fortnightly from 2000 to
March 1,2010?
Step 1: Compute for the FV of Deferred annuity in 2008
Step 2: Compute for compound interest for 2 years (2009 and 2010)
141,144.89 should be paid from the compound interest because there is no periodic
payment (annuity) of 500 to be recorded for 2009-2010; only the compound interest
shall be paid
9. Luffy Company is preparing its common-size FS and revealed the following information
below (in thousand pesos). How would Luffy’s retained earnings appear on a common-
size balance sheet?
If common size balance sheet- the basis should be from the TOTAL ASSETS
Inventory 20,000
/ Total assets 84,000
23.81%
11. Luffy Company is preparing its common-size FS and revealed the following information
below (in thousand pesos). How would Luffy’s COGS appear on a common-size
INCOME STATEMENT?
If common size INCOME STATEMENT- the basis should be from the SALES
Accounts receivable 10,000
Inventory 20,000
Total current assets 35,000
Total assets 84,000
Bonds payable 21,000
Retained earnings 7,000
Sales revenue 75,000
COGS 62,000
Income taxes expense 22,000
COGS 62,000
/ SALES 75,000
82.67%
12. LUFFY Division reported the following results for 2022 below. What is Luffy Division’s
RETURN ON SALES?
ANNUAL SALES P500,000
NET EARNINGS 80,000
INVESTMENT 250,000
16. If 3,000 is deposited at the beginning of each 6 months for 10 years at 7% compounded
semiannually, how much is in the fund at the end of 6.5 years after the payment?
FVAD = 50,030.96
17. If 3,000 is deposited at the beginning of each 6 months for 10 years at 7% compounded
semiannually, how much is in the fund at the beginning of 10 years?
FVad= 76,071.54
18. To create a fund worth 500,000 at the end of 5 years, 15 members of a cooperative
association agreed to contribute equal payments at the beginning of each month. How
much will each member contribute monthly if the money is invested at 8%
compounded monthly?
20. LUFFY Division reported the following results for 2022 below. What is Luffy Division’s
ASSET TURNOVER?
ANNUAL SALES P500,000
NET EARNINGS 80,000
INVESTMENT 250,000
21. LUFFY Division reported the following results for 2022 below. What is Luffy Division’s
Return on Investment (ROI)?
ANNUAL SALES P500,000
NET EARNINGS 80,000
INVESTMENT 250,000
26. Luffy signs a 4,200, 120-day not at the bank and receives proceeds of 4,130. What is the
discount rate?
27. Luffy signs a 4,500 discount note. The bank charges 18% discount rate and the proceeds
are 3,487.50. find the time of the note?