Time Value of Money Activity 1. Mr. Ang will be making a lump sum payment of $5 million on the house that he is wants to buy two years from now. If he will set aside funds and invest it that will earn interest of 12%, net of taxes every year. (10 PTS) A. How much does he need to invest today if the interest is compounded yearly? B. If the interest is compounded quarterly, how much does he need to invest? 2. Mrs. De Vera is planning her retirement. She has two options, the first is that the company she works for is offering a retirement plan wherein, if you contribute 20,000 annually, the company will add P15,000 to make it 35,000. The company is will also provide an 8% return on the retirement investment. The second option is provided by a financial firm that offers a 15% interest yearly for an annual payment of Php 20,000. Ordinary annuity is applied for both offers. (10 Pts) A. Compute for the future value for option A and Option B B. Which is a better option? Explain why. 3. Jenny wants to know how much would the value of her money will be if she deposited #15,000 yearly for 8 years with an interest rate of 12% per year. (5pts) 4. Ms. Alvaro's grandmother gave Bea an inheritance worth $25,000,000. She had plan to buy a new house, car and planned for a vacation for her family. However, she was surprised when her grandmother said that she will not get entire $25,000,000 upfront and was given the following options: A. Get 20,000,000 million upfront B. Money will be deposited into a trust fund with an interest rate of 9% annually and she will receive 2 million every year for 10 years. Compute for the future Value of Money for both option and Show your solution Which is the best option?. Explain your answer 5. Joey applied for an even principal payment housing loan worth $4,500,000.00 and was given 2 options. The first option has an interest rate of 7% per annum and is payable in 10 years. The second option has an interest rate of 9% per annum with a term of 5 years. Based on the data given, answer the following question. (30 pts) A. What is the yearly principal payment for both options? B. How much is the total interest for both options? C. What is the total amount of the house for both options? D. What is the first interest payment for option 1? E. What is the Last interest rate for the 2nd option? 6. Paul was applying for a personal loan. He has narrowed down his choices to 2 bank offers. Each bank is offering a P 500,000.00 personal loan payable in a year at 2.5% monthly interest. The difference was that the 1st bank (ART Bank) was offering an even principal Payment type of loan while the 2nd bank (CCC bank) is offering an even total payment loan. A. Create a loan schedule for both options. B. If you were the borrower which would you choose? Why?