
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
infoPractice Pack
Question
infoPractice Pack
Apply the concept of money-time equivalence on problem solving.

Transcribed Image Text:Content/Topics: Money-Time Relationships and Equivalence
Directions: Solve the following problems on a clean sheet of paper. Show a complete solution and write
legibly. Use ballpens only.
1. Determine the ordinary and exact simple interest on P5,000 for the period from January 15
to June 20,1993, if the rate of simple interest is 14%.
2. Determine the exact and ordinary simple interest on P1,200 for the period from January 16
to November 26, 1992, if the rate of interest is 24%.
3. A man borrows P10,000 from a loan firm. The rate of simple interest is 15%, but the interest
is to be deducted from the loan at the time the money is borrowed. At the end of one (1)
year he has to pay back P10,000. What is the actual rate of interest?
4. A man borrows P6,400 from a loan association. In repaying this debt he has to pay P400 at
the end of every 3 months on the principal and a simple interest of 16% on the principal
outstanding that time. Determine the total amount he has paid after paying all his debt.
5. If the sum of P12,000 is deposited in an account earning interest at the rate of 9%
compounded quarterly, what will it become at the end of 8 years?
6. A man possesses a promissory note, due 3 years hence, whose maturity value is
P6,700.48. If the rate of interest is 10% compounded semi-annually, what is the value of
this note now?
7. If you are investing your money which is better: 12% compounded monthly or 12.5%
compounded annually?
8. How many years are required for P1,000 to increase to P2,000 if invested at 9% per year
compounded annually, semi-annually, quarterly, monthly and continuously?
9. A man wishes to bequeath to his daughter P20,000 ten years from now. What amount
should he invest now if it will earn interest of 8% compounded annually during the first 5
years and 12% compounded quarterly during the next 5 years?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Includes step-by-step video
Trending nowThis is a popular solution!
Learn your wayIncludes step-by-step video
Step by stepSolved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education