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Math of Investment Quiz

The document contains 10 problems involving calculating present and future values of investments using various interest rates compounded annually, quarterly, and monthly. The problems cover scenarios such as real estate purchases with down payments and installments, annuities, pensions, and lump sum vs installment payments over different time periods.

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Lino Gumpal
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606 views1 page

Math of Investment Quiz

The document contains 10 problems involving calculating present and future values of investments using various interest rates compounded annually, quarterly, and monthly. The problems cover scenarios such as real estate purchases with down payments and installments, annuities, pensions, and lump sum vs installment payments over different time periods.

Uploaded by

Lino Gumpal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. Mr.

Y buys a real estate and paid cash amounting to P200,000 and the balance to be paid at annual installment of P50,000 for 5 years. If the interest rate is 8% compounded annually, determine the cash price equivalent of the real estate. 2. Suppose you win a lottery that entitles you to receive $500 per month for the next 20 years, If money is worth 6% compounded annually, what is the present value of this annuity? 3. Which would you prefer assuming an interest rate of 9% compounded annually. a. To receive P500,000 now or b. To receive P30,000 every year for 20 years? 4. Which would you prefer assuming an interest of 9% compounded annually. a. To receive P30,000 every year for 2 years b. To receive P55,000 now 5. Mr. D estimates that he will receive P9,000 pension every month for the next 10 years. If the market rate is 4% compounded monthly, determine the value of the pension today. 6. Dee acquired a house. The agreed payment terms provide for a down payment of P200,000 and the balance to be paid at 4 quarterly payments of P30,000. If the interest rate agreed is 4% compounded quarterly, a)determine the present value of the annual installments; b) determine the cash price equivalent of the house. 7. If X expects a present value of P40,000 of an annuity investment to be held for 4 years, how much will he have to deposit monthly to equate the said amount now earning 5% interest compounded monthly for 4 years. 8. Manny pays P2,000 in a fund for every month-end earning interest of 5% compounded monthly. If the term is 4 years, determine the investments present value. 9. Find the quarterly payment of a 5% compounded quarterly investment if its present value amounts to P35,880. The investment will be held for 5 years. 10. Determine the present value of P3,000 invested compounded monthly if the investment will be held quarters. at 5% for 5

1. Mr. Y buys a real estate and paid cash amounting to P200,000 and the balance to be paid at annual installment of P50,000 for 5 years. If the interest rate is 8% compounded annually, determine the cash price equivalent of the real estate. 2. Suppose you win a lottery that entitles you to receive $500 per month for the next 20 years, If money is worth 6% compounded annually, what is the present value of this annuity? 3. Which would you prefer assuming an interest rate of 9% compounded annually. a. To receive P500,000 now or b. To receive P30,000 every year for 20 years? 4. Which would you prefer assuming an interest of 9% compounded annually. a. To receive P30,000 every year for 2 years b. To receive P55,000 now 5. Mr. D estimates that he will receive P9,000 pension every month for the next 10 years. If the market rate is 4% compounded monthly, determine the value of the pension today. 6. Dee acquired a house. The agreed payment terms provide for a down payment of P200,000 and the balance to be paid at 4 quarterly payments of P30,000. If the interest rate agreed is 4% compounded quarterly, a)determine the present value of the annual installments; b) determine the cash price equivalent of the house. 7. If X expects a present value of P40,000 of an annuity investment to be held for 4 years, how much will he have to deposit monthly to equate the said amount now earning 5% interest compounded monthly for 4 years. 8. Manny pays P2,000 in a fund for every month-end earning interest of 5% compounded monthly. If the term is 4 years, determine the investments present value. 9. Find the quarterly payment of a 5% compounded quarterly investment if its present value amounts to P35,880. The investment will be held for 5 years. 10. Determine the present value of P3,000 compounded monthly if the investment will quarters. invested be held at 5% for 5

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