ANNUITY

1. A mother wish to earn P70,000.00 for an investment after 6 years so that she will have enough money to celebrate her daughter's 7th birthday. What equal amounts should the mother invest every year for 6 years if interest on the investment is 8% compounded quarterly? 2. A 2007 model car can be purchased with a down-payment of P115,000 and equal monthly insiaments of P8,500 for 48 months. if money is worth 12% compounded moniiny, windi is the equivalent cash price of the car? 3. A certain business guarantees an earning of P25,000 every month and a final addition earning of P85,000 at the end of 1 year. If the rate of interest is 10% compounded per month, what is it worth now? 4. A house & lot is offered for sale, the seller offers 3 methods of payments: a. P500,000 in cash b. P100,000 down-payment and P10,000 monthly installments for 4 years. c. P160,000 down-payment and P8,000 monthly installments for 4 years. If money is worth 12% compounded monthly, which is the most economical method of payment? 5. A debt of P15,000 with 11% interest compounded semi-annually is to be amortized by semi-annual payments over the next 6 years. The first due is 6mos. Determine the semi- annual payments, 6. A man purchased on monthly installments a P150,000 worth of land. The interest rate is 14% nominal and payable in twenty years. What is the monthly amortization? 7. Mr. Santos borrowed P30,000 two years ago. The terms of the loan are 10% interest for Nyears with uniform payments. He just made his second annual payment. How much principal does he still owe? 8. A machine is under consideration for investment. The cost of the machine is P28,000. Each year it operates, the machine generates a savings of P16,000. Given an effective annual interest rate of 16%, what is the discounted payback period in years, on the investment in the machine