Andrea earned Php2,500 from her Php700,000 investment. She placed it for 90 days @ exact interest. What was (a) the rate given to her investment and what was (b) the future value if it was under ordinary interest? 

1. (a) is 1.43% while (b) is php702,607.50 

2. (a) is 1.49% while (b) is Php702,502.50 

3. (a) is 1.49% while (b) is Php702,607.50  

4. (a) is 1.43% while (b) is Php702,502.50

 

question 2: Joaquin placed his Php35,000 at 1 2/5% (one and two-fifths percent) for one year and six months. Compute for (a) the future value and (b) the interest. 

1. none of the above 

2. (a) Php42,840.00 and (b) Php7,840.00 

3. (a) Php35,656.25 and (b) Php656.25 

4. (a) Php35.735.00 and (b) Php735.00

 

Question 3 Antonio inherited five million pesos from the life insurance of his grandmother. With no immediate use for the money; he wanted to put in a time deposit. The four banks offered the following: Philippine National Bank 2.00% for 30 days; Bank of the Philippine Islands 1.50% for 90 days; China Banking Corporation 1.75% for 60 days; and, Banco de Oro 2.25% for 45 days. What bank should Antonio choose? Consider that there is a 20% withholding tax for the interest income earned. 

a. Philippine National Bank 

b. Bank of the Philippine Islands

 c. China Banking Corporation

 d. Banco de Oro

 

CHOOSE IF  True or False

 1. The banker's rule follows the 365 days in a year for computation. 

2. The Truth in Lending Act protects both the debtor and the creditor. 

3. Interest for shorter period loans is more cost-effective than long-term loans. 

4. Bond issuance involves short-term financing. 

5. Interest is preferred by debtors if it is low.

6. The sooner you receive the money, the better. 

7. Simple interest is earned on a given sum and has become part of the principal at the end of the specified period. 

8. Creditors treat interest as income.

 9. Time is always expressed in years. 

10. Fifteen percent is 15.00 in decimal. 

11. The ordinary and exact interest yield the same result. 

12. Compounding is used to find the present value of each cash flow at time 0 

13. Cash outflows are indicated by entering negative values. 

14. Annuity is a level periodic stream of Cash Flows. 

15. Future value is the amount of money on which interest is paid.