Name:_______________________________ Course & Year: _____________
Exercise no. 1
SHOW YOUR SOLUTION
Instruction: Answer the questions correctly and it must be eligible. Upon submission kindly scan your
answers or compile the picture of your answer and convert it to pdf format. Please avoid cheating or
reduplication of your answers from your classmate or else your score will be zero.
1. An employee borrowed P800, 000 with 13% interest compounded semi-annually promised to pay every 6
months for 8 years starting today. What amount should be pay semi-annually?
2. A machine needs P6,000 semi-annually for its maintenance during its perpetual life. If effective interest is
16%, find the present worth of maintenance.
3. A farmer bought an equipment costing P13,000. The equipment may be purchased by installment for 5 years
at 8% compounded annually. Find the annual payments if all payments are made at the beginning of each
year.
4. What is the present worth of a 4 year annuity paying P4, 500 at the end of each year, with interest at 10%
compounded annually?
5. The maintenance cost of a machine this year is expected to be P6, 000. The cost will increase P1, 000 each
year for the subsequent 4 years. The interest is 15% compounded annually. What is the approximate worth
of maintenance for the machine over the full 5 years?
6. A machine needs P15, 500 annually for its maintenance during its perpetual life. Find the present amount of
maintenance if the interest is 5%.
7. What is the effective interest rate per year of a machine having a present amount of P900, 000 with P890
amount of maintenance during its perpetual life?
8. A car needs P5, 000 quarterly for its maintenance during its perpetual life. If the effective interest is 29%, find
the present amount of maintenance.
9. A contractor bought a concrete mixer at P150,500 if paid in cash. The mixer may also be purchased by
installment to be paid within 7 years. If money worth 9%. The amount of each annual payment, if all
payments made at the beginning of each year, is?
10. The maintenance cost of a machine this year is expected to be P505. The cost will increase P150 each year
for the subsequent 4 years. The interest is 8% compounded annually. What is the approximate worth of
maintenance for the machine over the full 5 years?
Summary of Answer
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