# MATH

```A. A newly married couple decided to buy a brand new car. The net amount of loan is Php 500, 000. They
plan to amortize the loan in monthly instalments for 3 years. If money is worth 12% convertible monthly?
a. How much is the monthly instalment?
π
1−(1+π)−π
[
]
π
=
500,000
1−(1+0.01)−36
[
]
0.01
= π·ππ ππ, πππ. ππ
b. How much is the outstanding balance after the second payment?
1−(1+π)−34
]
π
= 16,607.15 [
1−(1+0.01)−34
]
0.01
= π·ππ πππ, πππ. ππ
c. How much is the third payment goes to pay the interest?
Answer: πΌ3 = π(π2 ) = 0.01(476.669.63) = π·ππ π, πππ. ππ
B. Suppose you want to buy a rent to own house worth P450,000. You made a down payment of 15% of
the purchase price and take a 25-year mortgage for the balance.
a. What is your down payment?
Answer: π·π = πΆππ β πππππ &times; πππ‘π ππ π·π = 450,000(15%) = π·ππ ππ, πππ. ππ
b. What is your mortgage amount?
Answer: ππππ‘ππππ π΄πππ’ππ‘ = πΆππ β πππππ − π·π = 450,000 − 67,500 = π·ππ πππ, πππ. ππ
c. What is the total interest charged over the life of the loan if your monthly payment is P2,200?
πππ‘ππ πΌππ‘ππππ π‘ πΆβπππππ
= (ππππ‘βππ¦ πππ¦ππππ‘ &times; ππππππ ππ π‘πππ &times; ππ’ππππ ππ ππππ‘βπ  ππ π ππππππ)
− ππππ‘ππππ ππππ’ππ‘
= (2,200 &times; 25 &times; 12) − 382, 500 = 660, 000 − 382, 500 = π·ππ πππ, πππ. ππ
You work as a crew in the fast-food chain. You wanted to have a scooter type motorcycle for your daily
transportation going to your workplace but your monthly compensation will fall short if you push through
your needs. What will you do?
Answer: It is a situation of financial scarcity, where the individual has limited financial resources to fulfil
their basic job requirements, due the limited compensation of the job, the individual is not in the condition
to purchase a motorcycle by paying the price in a lump sum amount to the seller. Hence, I should take
into consideration the following options available with me, to purchase a motorcycle: a) equated monthly
Instalments options available with the automobile dealers, where I can easily reduce the financial burden
into small monthly instalments ranging from 6 to 36 months; b) short term bank credit with lower interest
rates to purchase a motorcycle for daily commute; c) purchase a motorcycle on half price than the current
market prices; and d) ask for salary in advance from the employer, which will allow me purchase a
motorcycle without facing any financial difficulties and higher interest rates on loans.
```