Time Value of Money Problems

PROBLEM #1

1. An investment requires a cast outlay upon entering in the contract amounting to Php100,000 that will earn Php 150,000 after 5years, compounded quarterly. The investment has an effective annual return of 8.24%. What is the net present value of the investment? (Round your factor into 3 decimal places)

PROBLEM#2

2. An investment has a cash outlay of Php 200,000 and will earn Php325,000 after 5years, compounded annually. The present value of the investment is Php201,825. What is the annual interest rate of the investment? (Round your factor into 3 decimal places)

PROBLEM #3

3. An investment requires a cash outflow of Php80,000 at the investment date. The investment will earn Php100,000 after 5 years, compounded quarterly. The effective annual return of the investment is 12.55%. What is the total interest income earned by the investment upon maturity? (Round your factor into 3 decimal places)

PROBLEM #4

4. A 10-year investment requires a cash outlay of Php200,000 over 5years. The investment will start to earn interest after the full payment and will earn Php30,000 for 10 years, compounded annually. The prevailing interest rate of this investment is 10% annually. What is the net present value of the investment? (Round your factor into 3 decimal places)

PROBLEM #5

5. Z, 50 years-old, enters in a life insurance contract that requires an outlay of Php9,000 every quarter and earns an interest of 8% annually. The 1st payment was made upon entering in the contract and the insured have a Php500,000 guaranteed return that will also earn interest until termination. The life insurance will be terminated either upon death of the insured or upon reaching the age of 60 years-old. Luckily, Z reached the 60 years of age. How much will he receive upon termination of the insurance? If Z died at the age of 55. How much will the beneficiaries be receiving? (Round your factor into 3 decimal places)