COMPOUND INTEREST

PRESENT VALUE

Exercise 2.4.2

Solve the following problems. Use scientific calculator or table III. Make use of time diagram if
necessary.

1. Discount P65,000 for 2 yrs and 9 months at 12% compounded quarterly.

2. If P275,000 is due in 4 yrs and 11months compounded semi-annually at 11%, What is its
present value?
3. A debt of 50,000 is due in 1 year and 8 months. If the debtor wishes to pay his creditor
today at 12% compounded semi-annually, how much would he have to pay now?
4. If money is worth 10% compounded annually, find the present value of P250,000 due at
the end of 5 years and 3 months.
5. Discount P10,600 for 10 months at 18%, m=24.
6. Rex owes Ariel P35,000 due on march 01, 2002 what amount did Ariel receive if Rex
have paid his debt on January 01, 2000 with discount rate of 7.2% comp. monthly?
7. Discount P15,500 for 11 months compounded quarterly at 18%
8. Discount P145,000 at 18% compounded annually from august 15,1999 to December 15,
2003.
9. On Sept. 05, 2000, Bing C. Ramirez discounted a note with an accumulated amount of
P178,950.56 (principal plus interest) due on December 05, 2002 at 15% compounded
semi-annually, How much proceeds did Bing received?
10. A) Accumulate P120,000 for 6 yrs and 8 months, m=4 at 16%, and B) Discount the result
at 18%, for 2 yrs and 10 months, m=4.

P. 65-66