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The following terms of payment for an annuity are as follows: Periodic payment = P20,000 Payment interval = 1 month Interest rate = 18% compounded monthly Terms = 15 years 1. Find the present worth paid of all the payments if it is paid at the end of each month. 2. Find the difference between the sums of an annuity due and an ordinary annuity on these payments. 3. Find the difference between the present values of an annuity due and an ordinary annuity based on these payments.

The following terms of payment for an annuity are as follows: Periodic payment = P20,000 Payment interval = 1 month Interest rate = 18% compounded monthly Terms = 15 years 1. Find the present worth paid of all the payments if it is paid at the end of each month. 2. Find the difference between the sums of an annuity due and an ordinary annuity on these payments. 3. Find the difference between the present values of an annuity due and an ordinary annuity based on these payments.

EBK CFIN
EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter4: Time Value Of Money
Section: Chapter Questions
Problem 12PROB
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The following terms of payment for an annuity are as follows:
Periodic payment = P20,000
Payment interval = 1 month
Interest rate = 18% compounded monthly

Terms = 15 years
1. Find the present worth paid of all the payments if it is paid at the end of each month.

2. Find the difference between the sums of an annuity due and an ordinary annuity on these payments.

3. Find the difference between the present values of an annuity due and an ordinary annuity based on these payments.

Anwers. 1. P1,214,911.246 2. P271,687.35 3. P18,628.67

Problem 3 The following terms of payment for an annuity are as follows: Periodic payment = P20,000 Payment interval = 1 month Interest rate = 18% compounded monthly = 15 years Terms 1. Find the present worth paid of all the payments if it is paid at the end of each month. 2. Find the difference between the sums of an annuity due and an ordinary annuity on these payments. 3. Find the difference between the present values of an annuity due and an ordinary annuity based on these payments. Ans. 1. P1,214,911.246 2. P271,687.35 3. P18,628.67
Transcribed Image Text:Problem 3 The following terms of payment for an annuity are as follows: Periodic payment = P20,000 Payment interval = 1 month Interest rate = 18% compounded monthly = 15 years Terms 1. Find the present worth paid of all the payments if it is paid at the end of each month. 2. Find the difference between the sums of an annuity due and an ordinary annuity on these payments. 3. Find the difference between the present values of an annuity due and an ordinary annuity based on these payments. Ans. 1. P1,214,911.246 2. P271,687.35 3. P18,628.67
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