Mathematics of Investment Final Exam

Name: ____________________________________________

/30
Score:

Course, Yr. & Section: ___________________________

Date:

_____________________
Direction: Shade the circle that corresponds to your answer. If you are to change your
answer, just cross out your first shaded circle then shade your final answer. Changing of
answer is only allowed once.

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Prepared by: Jacky Boy E. Atienza

General instructions and agreements:

1. Work independently and honestly.
2. Use only black or blue inked pen.
3. This is a closed book/ notes/ notebooks
examination.
4. No extra sheets are allowed; use the back
of the test paper for your scratch.
5. You are allowed to ask questions or
queries only to the Instructor with regards to
the exam.
6. You are not allowed to talk to your
classmate/s during exam.
7. You are not allowed to borrow your
classmates calculator during exam.
8. You are not allowed to use your mobile
phones, mp3 or other gadgets except your
calculator during exam. Turn your mobile
phone to Silent mode.
9. Anyone caught in the act of any form of
cheating will receive a Final Grade of 5.0
(FAILED).

Page 1 of 5

Mathematics of Investment Final Exam

30.

1) The invested capital is also known as _______________.

A. Interest

B. Final Amount

C. Principal

D. Discount

2) A type of simple interest known as the Bankers rule.

I OA

A.

D.

I OE

B.

C.

I EA

I EE

3) To discount the final amount means to find the _____________.

A. Discount

B. Present value

C. Interest

D. Interest rate

4) How much was borrowed if the interest at 8% after 3 months is Php200?

A. Php10, 000

B. Php10, 200

C. Php2, 500

D. Php2, 700
5) Ravlam Nalor borrowed Php5, 000 for 2 years at 10% interest rate. How much must he
repay at the end of 2 years?
A. Php1, 000

B. Php5, 000

C. Php6, 000

D. Php7, 000
6) Find the time between May 30, 2012 and December 30, 2012.
A. 210 days

B. 212 days

C. 214 days

D. 216 days

7) Using the results of #6 compute for the interest if the amount borrowed is Php10, 000
at 12%.
A. Php703.56

B. Php713.33

C. Php716.67

D. Php700
8) At 8.5% simple discount, find the present value of Php4, 560 which is due at the end
of
2 years and 3 months.
A. Php3, 687.90

B. Php5, 638.33

C. Php5, 432.10

D. Php3, 827.91

9) The _____________________________ is an interest rate compounded annually to yield the

same amount of interest per year.
A. nominal rate

B. effective rate

rate

Prepared by: Jacky Boy E. Atienza

Page 2 of 5

C. discount rate

D.

equivalent

Mathematics of Investment Final Exam

10) _____________________________ is the time between two successive conversions of
interest.
A. conversion period

B. exact time

C. approximate time

D. time in years
11) ________________________________ is the result when the interest is added to the
principal periodically and their sum becomes the principal for the following period.
A. Present value
12) If

B. Compound interest

C. Compound amount

D. Annual rate

m=2 , the conversion period is __________.

A. annually

B. monthly

C. semiannually

D. quarterly

13) Mr. Jose De Leon wishes to invest a sum of money on his sons 12th birthday in a trust
fund, which gives interest at 12% compounded quarterly. How much must he invest if he
wishes the money to amount to Php150, 000 by the time his son reaches 21st birthday?
A. Php48, 983.53

B. Php51, 754.86

C. Php489, 305.67

D. Php434,

471.75
14) Accumulate Php4, 750 at 6% compounded quarterly for 6 years.
A. Php4, 923.98

B. Php4, 582.16

C. Php3, 322.83

D. Php6, 790.14

15) Discount Php7, 890 at 8% compounded semi-annually for 5years.

A. Php4, 734

B. Php11, 046

C. Php11, 593

D. Php5, 330
16) If money is worth 6% compounded semi-annually, what single payment at the end of
4 years will settle a debt of Php1,000 due in 1 year and a loan of Php6,000 due in 6
years?
A. Php6, 510.41

B. Php5, 330.92

C. Php1, 194.05

D. Php6, 524.97

17) __________ is an annuity in which payments are made at the end of the payment
periods.
A. perpetuity

B. ordinary annuity

C. annuity due

D.

deferred annuity
18) __________ is an annuity in which payments are made at the beginning of the
payment period.
A. perpetuity

B. ordinary annuity

C. annuity due

D.

deferred annuity
19) __________ is an annuity whose term does not begin until a specified time expires.
Prepared by: Jacky Boy E. Atienza

Page 3 of 5

Mathematics of Investment Final Exam

A. general annuity

B. ordinary annuity

C. annuity due

D.

deferred annuity
20) To _______________ an interestbearing debt is to pay the debt, principal, and interest,
by a series of equal payments at the end of equal intervals of time.
A. amortize

B. accumulate

C. discount

D. purchase

21) Mr. John Leigh deposits P500 at the end of each month for 3 years. If money is worth
6% compounded monthly, how much will be in her account at the end of 3 years?
A. Php19, 668.06

B. Php16, 435.51

C. Php19, 766.39

D. Php16, 517.69

22) Ms. Anne Margaret pays P200, 000 and agreed to pay P15,000 at the end of each 3
months for 5 years. If money is worth 8% converted quarterly, what is the cash price of
the lot?
A. Php564, 460.55

B. Php445, 271.50

C. Php571, 749.76

D. Php450, 176.93
23) If money is worth 10% compounded semiannually, find the present value of annuity
whose annual rent is Php1, 700 which is payable semiannually for 12 years and 6
months.
A. Php40, 568.04

B. 11, 979.86

C. Php81, 136.07

D.

Php23,

959.71
24) Rian borrows P5,000 and agrees to pay equal payments at the end of each month for
2 1/2 years. If money is worth 12% converted monthly, find the monthly payment.
A. Php143.74

B. Php193.74

C. Php191.82

D. Php142.32
25) A man invests P 2,500 at the beginning of each year for 7 years. If he gets interest
at 5% converted annually, how much does he have at the end of 7 years?
A. Php16, 158.03

B. Php23, 872.77

C. Php21, 372.77

D. Php16, 965.93

26) A man agrees to make equal payments at the beginning of each 3 months for 10
years to discharge a debt of P 8,000 due now. If money is worth 8% compounded
quarterly, find the quarterly payments.
A. Php132.45

B. Php292.45

C. Php129.85

D. Php286.71
27) If money is worth 6% compounded semi-annually, find the present value of a
sequence of 10 semi- annual payments of P 300 each, the first due at the end of 5 years.
Prepared by: Jacky Boy E. Atienza

Page 4 of 5

Mathematics of Investment Final Exam

A. Php1, 961.31

B. Php2, 961.31

C. Php3, 961.31

D. 961.31

28) Find the present value of perpetuity of P 500 payable at the end of each 3 months if
money is worth 7% compounded quarterly.
A. Php28, 571.43

B. Php28, 671.43

C. Php28, 771.43

D. Php28, 881.43

29) Find the present value of perpetuity of P 1,800 payable every 3 month if money is
worth 8% compounded semi-annually.
A. Php88, 891. 19

B. Php89, 891. 19

C. Php90, 891. 19

D.

Php91,

891.

19
30) A debt of P 25,000 with

1
2 % interest converted annually is to be paid by equal

annual payments for 6 years. Find the principal outstanding just after the 4th payment.
A. Php5, 004.48

B. Php9, 239.87

Formulas:

D. Php6, 701.16

This is the day the LORD has made;

we will rejoice and be glad in it.
Psalm 118:24

S=P ( 1+rt )

I =Prt

Prepared by: Jacky Boy E. Atienza

C. Php3, 629.47

Final Amount
Page 5 of 5

(S ):

Mathematics of Investment Final Exam

S=P ( 1+i )

S =R

Present value ():

P=S ( 1+i )n

R=

S (i)
(1+i)n1

Ordinary Annuity
A =R

S=R

(1+i) 1
i

R=

Si
R=
n
(1+i ) 1

R=

A per =

Sdue ( i )

( 1+i )n+1(1+i)

A due =R

R=

n+1

R
i

General perpetuity

Annuity Due
(1+i) 1
1
i

A (i)
(1+i) (1+i)(n+ h)

A per =

Ai
n
1(1+i)

S due =R

( 1+i )h(1+ i)(n +h)

i

Perpetuity

1(1+ i)n
A=R
i
R=

( 1+i )n1
i

( 1+i )(1+ i)n+1

i
A due ( i )

(1+i)(1+ i)n+1

Deferred Annuity

Prepared by: Jacky Boy E. Atienza

Page 6 of 5

R
k
(1+i) 1

Mathematics of Investment Final Exam

Prepared by: Jacky Boy E. Atienza

Page 7 of 5

ANSWER KEY
1. C
2. B
3. B
4. A
5. C
6. D
7. D
8. A
9. B
10.A
11.C
12.C
13.B
14.D
15.D
16.D
17.B
18.C
19.D
20.A
21.A
22.B
23.B
24.B
25.C
26.D
27.A
28.A
29.C
30.B