Beruflich Dokumente
Kultur Dokumente
103)
5. PAYMENTS
X(1 + 7%)0 = X
Then set up the equation of the value and solve for the unknown X.
Payments = debts
X = P5,000(1.310796) + P8,000(0.7628952)
= P6,553.98 + P6103.16
= P12,657.14
Thus, the payment of P12,657.14 on the 5th year will equitably replace the
P5,000 debt due on the 3rd year and the P8,000 debt due on the 7th year.
Example 4
A man owes P7,500 due now. The lender agrees to let him pay his obligation with 2
equal payments due after 1 and 2 years. If money is worth 12%, m = 2, how
much would be his payment?
A man owes P5,000 with a term of 3 years and interest of 10% compounded
quarterly, and P10,000 with a term of 5 years and interest of 12% compounded
semi- annually.
If the money is worth 8% quarterly, what single payment at the end of 6 years will
equitably replace these 2 debts?
Solution :
A. Part 1: Find the Future Values of the OLD obligations 5,000 and 10,000
Given: F1 = ? F2 = ?
P1 = P5,000 P2 = P10,000
j1 = .10 j2 = .12
m1 = 4 m2 = 2
t1 = 3 t2 = 5
= P5,000(1.3448888) = P10,000(1.7908477)
= P6,724.44 = P17,908.48
Equation of Value:
X = P27,911.85
Example 2.11.5