Scribd Logo
Upload

Welcome to Scribd!

  • 12 views

    Quiz 4. Amortization and Sinking Fund

    Uploaded by

    Amethyst Chiong

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Quiz 4. Amortization and Sinking Fund

    Uploaded by

    Amethyst Chiong
    12 views8 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    12 views8 pages

    Quiz 4. Amortization and Sinking Fund

    Uploaded by

    Amethyst Chiong

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    ______________________________________________________________________

    Quiz 4. Amortization and Sinking Fund

    Name: Lucina Mae B. Chiong MM8: Mathematics of Investment


    CNU ID No.: 20-000572 Date: October 16, 2021 - Saturday
    ______________________________________________________________________
    Do as directed.
    Directions. Use your scientific calculator to solve each of the problems below and show
    your solutions.

    1. A loan of PhP20,000 is to be amortized with 10 equal quarterly payments. If the interest


    rate is 6%, compounded quarterly, what is the periodic payment?
    2. A newly married couple who borrow PhP90,000 for 30 years at 7.2% compounded
    monthly, must make monthly payments of PhP610.91.

    a.) Find their unpaid balance after 2 years.


    b) During the first 2 years, how much interest do they pay?

    Find: The interest that the newly married couple pay during the first 2 years
    Solution/ Answer:

    Repayment
    of the
    Amount Interest Outstanding
    Annuity Principal
    Period Owed on Portion of the Loan
    Payment Portion of
    Principal Annuity Balance
    the
    Annuity
    1 ₱ 90,000.00 ₱ 610.91 ₱ 540.00 ₱ 70.91 ₱ 89,929.18
    2 ₱ 89,929.18 ₱ 610.91 ₱ 539.58 ₱ 71.34 ₱ 89,857.85
    3 ₱ 89,857.85 ₱ 610.91 ₱ 539.15 ₱ 71.76 ₱ 89,786.08
    4 ₱ 89,786.08 ₱ 610.91 ₱ 538.72 ₱ 72.19 ₱ 89,713.89
    5 ₱ 89,713.89 ₱ 610.91 ₱ 538.28 ₱ 72.63 ₱ 89,641.26
    6 ₱ 89,641.26 ₱ 610.91 ₱ 537.85 ₱ 73.06 ₱ 89,568.20
    7 ₱ 89,568.20 ₱ 610.91 ₱ 537.41 ₱ 73.50 ₱ 89,494.70
    8 ₱ 89,494.70 ₱ 610.91 ₱ 536.97 ₱ 73.94 ₱ 89,420.76
    9 ₱ 89,420.76 ₱ 610.91 ₱ 536.52 ₱ 74.39 ₱ 89,346.37
    10 ₱ 89,346.37 ₱ 610.91 ₱ 536.08 ₱ 74.83 ₱ 89,271.54
    11 ₱ 89,271.54 ₱ 610.91 ₱ 535.63 ₱ 75.28 ₱ 89,196.26
    12 ₱ 89,196.26 ₱ 610.91 ₱ 535.18 ₱ 75.73 ₱ 89,120.53
    13 ₱ 89,120.53 ₱ 610.91 ₱ 534.72 ₱ 76.19 ₱ 89,044.34
    14 ₱ 89,044.34 ₱ 610.91 ₱ 534.27 ₱ 76.64 ₱ 88,967.70
    15 ₱ 88,967.70 ₱ 610.91 ₱ 533.81 ₱ 77.10 ₱ 88,890.59
    16 ₱ 88,890.59 ₱ 610.91 ₱ 533.34 ₱ 77.57 ₱ 88,813.03
    17 ₱ 88,813.03 ₱ 610.91 ₱ 532.88 ₱ 78.03 ₱ 88,734.99
    18 ₱ 88,734.99 ₱ 610.91 ₱ 532.41 ₱ 78.50 ₱88,656.49
    19 ₱88,656.49 ₱ 610.91 ₱ 531.94 ₱ 78.97 ₱88,577.52
    20 ₱88,577.52 ₱ 610.91 ₱ 531.47 ₱ 79.45 ₱88,498.08
    21 ₱88,498.08 ₱ 610.91 ₱ 530.99 ₱ 79.92 ₱88,418.16
    22 ₱88,418.16 ₱ 610.91 ₱ 530.51 ₱ 80.40 ₱88,337.76
    23 ₱88,337.76 ₱ 610.91 ₱ 530.03 ₱ 80.88 ₱88,256.87
    24 ₱88,256.87 ₱ 610.91 ₱ 529.54 ₱ 81.37 ₱ 88, 175.50
    Total:
    ₱ 𝟏𝟐, 𝟖𝟑𝟕.𝟐𝟕

    Final answer: Therefore, the interest that the newly married couple pay during the
    first 2 years is ₱ 𝟏𝟐, 𝟖𝟑𝟕.𝟐𝟕.
    3. A debt of PhP150,000.00 with interest rate at 10% payable monthly will be amortized by
    equal payments at the beginning of each month for 10 years. Construct the amortization
    table for the first five periodic payments.
    b.) The amortization table for the first five periodic payments

    Repayment
    Interest of the
    Outstanding
    Amount Owed Annuity Portion of Principal
    Period Loan
    on Principal Payment the Portion of
    Balance
    Annuity the
    Annuity
    1 ₱ 150,000.00 ₱ 1,965.88 ₱ 1,233.62 ₱ 732.26 ₱ 149,267.74
    2 ₱ 149,267.74 ₱ 1,965.88 ₱ 1,227.52 ₱ 738.36 ₱ 148,529.38
    3 ₱ 148,529.38 ₱ 1,965.88 ₱ 1,221.36 ₱ 744.52 ₱ 147,784.86
    4 ₱ 147,784.86 ₱ 1,965.88 ₱ 1,215.16 ₱ 750.72 ₱ 147,034.14
    5 ₱ 147,034.14 ₱ 1,965.88 ₱ 1,208.90 ₱ 756.98 ₱ 146,277.16
    4. The vehicle owner provide PhP10,000.00 for the repair and maintenance of his Mitsubishi
    car, He decides to place equal deposits in a fund at the end of each six months. If the money
    is invested at 8% compounded semi-annually.

    a.) Find the periodic deposits.


    b.) Construct a sinking fund schedule to show the accumulated savings fund into
    PhP10,000.00 at the end of 2 years.

    Given: S = ₱ 10, 000.00


    j = 8% = 0.08
    m=2
    i = j/m = 0.08/2 = 0.04
    n = m(t) = 2 (2) = 4
    t = 2 years
    Required: Construct a sinking fund schedule
    Solution/Answer:

    Interest at
    8% Payments to
    No. of Semi- In Fund at In Fund at
    Compounded Fund at the
    annually Beginning of the End of
    Semi- End of
    Payments Interval Interval
    annually Interval
    received
    1 ₱ 2, 354.90 ₱ 2, 354.90
    2 ₱ 2, 354.90 ₱ 94.20 ₱ 2, 354.90 ₱ 4, 804.00
    3 ₱ 4, 804.00 ₱ 192.16 ₱ 2, 354.90 ₱ 7, 351.06
    4 ₱ 7, 351.06 ₱ 294.04 ₱ 2, 354.90 ₱ 10, 000.00

    End
    ==================================================================

    You might also like