where: A. - present value of ordinary annuity R = amount of periodic payment i = rate of interest per conversion period m = number of conversion periods per year n = number of payments periods 2. Mr. P. Rar for a loan interest IT Examples: Given: 1. A man obtains a loan of P50,000 to be amortized by equal payment payment and the total amount of interest to be paid at the end of each end of each 6 months at 8% compounded semi-annually. Find the periode Given: months. Solution A = P50,000 For the Sub n = 6(3 years x 2 periods per year) j=8% (m = 2) 8% or = 4% or 0.04 2 Solutions: For the periodic payment: Substitute the values in the formula, we have: R= Ag 1-(1+i)" i P50,000 1-(1+0.04) 0.04 R = P9,538.10 (rounded to the nearest centavo Using a scientific calculator, R = 50,000 + (1 - (1 +.04) ^6 +/-) - .04) = P9,538.10 By A P17,8 Total Amount to be =R x 6 payments paid for 3 years = P9,538.10 x 6 = P57,228.60 Total Interest Paid for 3 Years = Total Amount Paid - Principal (Loan) = P57,228.60 - P50,000.00 = P7,228.60 paid for 3 years is P7,228.60. Therefore, the periodic payment is P9,538.10 and the total interest 162 BUSINESS MATHEMATICS ~ BUSINES for Senior High Schoo for Senior High School