Question

**Question 10 **

A debt of RM6,500 due 5 months ago and another RM12,750 due in 13 months are to be settled by making two equal payments, one at the end of four months, one at the end of seven months. Find the size of payment using, the four month as the focal date. Assuming money is worth 9% per annum simple interest.

**Question 11 **

Find the value in 3 years’ time of RM16,200 invested at 5% compounded annually. In the following 2 years, the interest rate is expected to rise to 8%. Find the value of the investment at the end of the 5 years period, and find overall percentage increase.

Answer #1

(10) Let the equal payments made be X each

Interest rate = 9% = 0.09/12 monthly

Hence, Value of Payments at four month = X +
X/(1+0.09/12)^{9} = 1.93X

Value of settlement amount at fourth month =
6500*(1+0.09/12)^{9} + 12750/(1+0.09/12)^{9} =
RM18872.93

Hence, 1.93X = 18872.93

=> X = RM9778.72

(11) Investment Amount = RM16200

Rate of Interest for first three years = 5%

Investment amount at end of Year 3 = 16200*(1.05)^{3} =
18753.53

Rate of Interest for Next 2 years = 8%

Investment Amount at end of year 5 = 18753.53*(1.08)^{2}
= RM21874.12

A debt of RM 4,400 due in two years and another RM 7,700 due in
seven years will be settled by making a single payment four years
from now.Find the total payment assuming that money is worth 5%
compounded quarterly. Use the fourth year as the focal date.

$4500 due three months ago but not paid and $2500 due in three
months are to be replaced by a payment of $3000 in one month from
now and two equal payments in two and four months from now. Find
the equal payments if the interest rate is 4% percent annum. Use
today as the focal date

Scheduled debt payments of $1500.00 due seven months ago,
$1200.00 due two months ago, and $1800.00 due in five months are to
be settled by two equal payments now and three months from now
respectively. Determine the size of the equal replacement payments
at 9% p.a. compounded monthly.

2. Scheduled debt payments of $1500.00 due seven months ago,
$1200.00 due two months ago, and $1800.00 due in five months are to
be settled by two equal payments now and three months from now
respectively. Determine the size of the equal replacement payments
at 9% p.a. compounded monthly. (15 points)

Question 1. .Scheduled payments of $400 due now and $700 due in
five months are to be settled by a payment of $500 in three months
and a final payment in eight months. Determine the amount of the
final payment at 6% p.a., using eight months from now as the focal
date.
Question 2. Two amounts owing from the past were to be paid
today. One debt was $620 from one year ago and the other was $925
from six...

Payment of $1,200 was due four months ago, and payment of $1,500
is due in eight months. What single payment due in three
months will repay the debt, if the interest rate is 12% compounded
monthly, and the focal date is in three months.

You are owed payments of $800 due today, $1,000 due in five
months and $1,200 due in one year. You have been approached to
accept a single payment seven months from now. What amount should
you accept in seven months in place of the three payments? Use an
interest rate of 9% per annum and 7 months from now as the focal
date.

Question 19
Suppose P5,000 is invested at the end of each six months for
three years and that 19% interest is paid compounded semi-annually.
How much will be in the account after three years?
A. P7,850.00
B. P10,700.00
C.P45,623.19
D. P38,094.29
Question 20
Find the present value of an ordinary annuity if its value at
the end of three years is P50,000. Assume money is worth 8%
compounded quarterly.
A. P38,000.00
B. P60,575.34
C. P39,424.66
D. P35,352.42
Question 21
If...

14. Find the present value of $2000 due in three years and 8
months if money is worth 8% p.a. compounded quarterly.
15. How long does it take for money to double at 5% compounded
annually.
13. Determine the amount of money that must be invested for 245
days at 5.75% to earn $42.46

Scheduled payments of 1288$ due
two years ago and 708$ due in six years are to be replace by two
equal payments. The first replacement payment is due in one year
and the second payment is due in nine years. Determine the size of
the two replacement payments if interest is 7.5% compounded monthly
and the focal date is one year from now.

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