• solve each question
• STATE THE GIVEN, REQUIRED AND SOLUTION
• DRAW CASH FLAW DIAGRAM FOR EACH QUESTION

1. A man borrowed P100,000 to a local bank at an interest rate of 10 % compounded annually. What is the monthly payment for this loan if the bank required it to be paid at the beginning of the first day of the month for a period of 30 years? Show the Cash Flow Diagram. State your reference period in the solution as reflected in the diagram.
2. An asset is purchased by a man paying P300,000 down payment and promising to pay P28,000 every 3 months for the next 10 years. Interest rate is at 12% compounded quarterly. Compute for the initial cost of that asset. Also, if the payment was missed the first 12 payments, what must he pay when the time the 13thpayment is due to bring himself up to date? Show the Cash Flow Diagram. State your reference period in the solution as reflected in the diagram.
3. A man loans 200,000 from a bank with interest at 8% compounded quarterly. He then agrees to pay 6 equal quarterly payments to settle the loan, the first being due at the end of the 8th quarter. Compute for the quarterly payment. Show the cash flow diagram. State your reference period in the solution as reflected in the diagram.