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    Unit2TimeandMoneyB - Lavarias - Lorenz Jay

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    Carmelo Janiza Lavarey
    1. A man invested ₱100,000 at 25% annual interest for 3 years. He then borrowed ₱50,000 at 20% annual interest for 2 years to reinvest. After repaying the loan and interest, he withdrew ₱20,000 annually from the fund for 5 years. The final withdrawal amount was ₱1,650,321.47. 2. To provide ₱18,000 annual retirement income from age 60-70, a man calculated he must invest equal amounts each year from age 41-59 at 10% annual interest. The required annual investment amount is ₱2,285.25. 3. A company took out

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    Unit2TimeandMoneyB - Lavarias - Lorenz Jay

    Uploaded by

    Carmelo Janiza Lavarey
    1K views4 pages
    1. A man invested ₱100,000 at 25% annual interest for 3 years. He then borrowed ₱50,000 at 20% annual interest for 2 years to reinvest. After repaying the loan and interest, he withdrew ₱20,000 annually from the fund for 5 years. The final withdrawal amount was ₱1,650,321.47. 2. To provide ₱18,000 annual retirement income from age 60-70, a man calculated he must invest equal amounts each year from age 41-59 at 10% annual interest. The required annual investment amount is ₱2,285.25. 3. A company took out

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    1. A man invested ₱100,000 at 25% annual interest for 3 years. He then borrowed ₱50,000 at 20% annual interest for 2 years to reinvest. After repaying the loan and interest, he withdrew ₱20,000 annually from the fund for 5 years. The final withdrawal amount was ₱1,650,321.47. 2. To provide ₱18,000 annual retirement income from age 60-70, a man calculated he must invest equal amounts each year from age 41-59 at 10% annual interest. The required annual investment amount is ₱2,285.25. 3. A company took out

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views4 pages

    Unit2TimeandMoneyB - Lavarias - Lorenz Jay

    Uploaded by

    Carmelo Janiza Lavarey
    1. A man invested ₱100,000 at 25% annual interest for 3 years. He then borrowed ₱50,000 at 20% annual interest for 2 years to reinvest. After repaying the loan and interest, he withdrew ₱20,000 annually from the fund for 5 years. The final withdrawal amount was ₱1,650,321.47. 2. To provide ₱18,000 annual retirement income from age 60-70, a man calculated he must invest equal amounts each year from age 41-59 at 10% annual interest. The required annual investment amount is ₱2,285.25. 3. A company took out

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 4

    1. Today you invested ₱100,000 into a fund that pays 25% interest compounded annually.

    Three years
    later, you borrow ₱50,000 from a bank at 20% annual interest and invest the fund. Two years later you
    withdraw enough money from the bank to repay the bank loan and all interest due on it. Three years
    after the withdrawal, you start taking ₱20,000 per year out of the fund. After 5 withdrawals, you
    withdraw the balance in the fund. How much was withdrawn?

    ₱50,000
    i = 0.20 annual interest

    ₱20,000

    F5 F13

    ₱100,000 ₱50,000 F7 F12

    i = 0.25 compounded annually


    F 5=50000 ¿
    F 5=7 0 , 000
    F 7=100,000 ( 1+ 0.25 )7 +50,000 (1+ 0.25 )4−72,000 ( 1+0.25 )2
    F 7=489532.47
    ( 1+0.25 )5−1
    486407.47 ( 1+0.25 )6 −20000 ( 1+ 0.25 )1 =F 13
    0.25
    F 13=₱ 1,650,321.47

    2 . A man wishes to provide a fund for his retirement such that from his 60th to 70th
    birthdays he will be able to withdraw equal sums of ₱18,000 for his yearly expenses. He invests equal
    amounts for his 41st to 59th birthdays in a fund earning 10% compounded annually. How much should
    each of these amounts be?

    LET 41 st birthday = year 0


    A = ₱18,000

    60th 70th
    th
    41 st
    59

    i = 0.10 compounded annually


    A
    (1+0.10)1 9−1 1−(1+0.10)−1 1
    A =18000
    0.10 0.10
    1−(1+0.10)−1 1
    A=18000
    (1+0.10)1 9−1
    A=₱ 2,285. 25

    3 . A company will borrow a loan to finance a 10-year project that will require an initial installation cost of
    ₱2,500,000. After 2 years another P500,000 and a regular annual upkeep cost of ₱75,000 paid every end
    of the year. If the interest rate of the loan is 2% per annum, what amount should be loaned?
    ₱75,000

    ₱2,500,000 ₱500,000

    i = 0.02 per annum

    2500000+500000+ ( 75000∗9 )
    P=
    ( 1+0.02 )10
    P= ₱ 3,014,780.00

    4 . A businessman has to settle a debt of 4 equal semi-annual payments of ₱50,000 at 9% rate of interest
    compounded semi-annually. However, he was not able to do so. Instead, he negotiated with the bank to
    settle it into 8 quarterly payments at the same 9% interest rate but compounded quarterly. How much
    should the new payments be?

    ₱50,000
    i = 0.09 compounded semi-annually

    i = 0.09 compounded quarterly


    A
    0.09 4 −8
    0.09
    50000
    ( 1+
    2 )−1
    =A
    (
    1− 1+
    4 )
    0.09 0.09
    2 4
    A=₱ 29,516.23

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