Problem 3

A man deposit P5000 each year in the bank and becomes P79,687 in
10 years with annual interest. Find annual interest of the investment.

Given: P = P5000
n = 10 years
F = P79,687

Required: annual interest (i)

•Solution:
 
Formula for Ordinary Annuity case B
(NOTE: Annuity is a series of equal payments occurring at equal interval of time)

1. Use this formula of Ordinary annuity case B:

2. Substitute the given to the formula used:

3. The answer will be:

%
Problem 4
A man deposit P50,000 and withdrawn P6635.00 per year. Interest
rate is 8% annually. In how many years will a deposit become zero?

Given: P = P50,000
R = P6,635 per year
i = 8% annually

Required: Years will the deposit become zero (n)

•Solution:
 
Formula for Ordinary Annuity case A

1. Use the formula for ordinary annuity case A:

2. Substitute the given to the formula to get the n number of years required in the problem:

3. The answer will be: