(Please use this template)
Summative Test on Amortization and Sinking Fund
Name: Lucina Mae B. Chiong MM8: Mathematics of Investments
CNU ID No.: 20-000572 Due Date: Oct. 18, 2021 – Mon (until 11:59 p.m.)
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Do as directed. Show your solutions:
Solve each of the following.
1. Mycah borrows P10,000 from BPI Bank with an interest rate of 6% compounded quarterly, to
be repaid by equal quarterly payments in one year. Find a.) her remaining liability just after
the second payment b.) the principal which will be paid on her third payment. c.) Construct
the amortization schedule.
c.) Required: Construct the amortization schedule
Repayment
Interest
Amount of the
Annuity Portion of Outstanding
Period Owed on Principal
Payment the Loan Balance
Principal Portion of
Annuity
the Annuity
1 ₱ 10, 000.00 ₱ 2, 594.45 ₱ 150.00 ₱ 2, 444.45 ₱ 7, 555.55
2 ₱ 7, 555.55 ₱ 2, 594.45 ₱ 113.33 ₱ 2, 481.12 ₱ 5, 074.44
3 ₱ 5, 074.44 ₱ 2, 594.45 ₱ 76.12 ₱ 2, 518.33 ₱ 2, 556.11
4 ₱ 2, 556.11 ₱ 2, 594.45 ₱ 38.34 ₱ 2, 556.11 ₱ 0.00
2. Josette purchases a brand-new Mitsubishi Strada car worth P1,068,000 and pays P468,000
down payment. The balance, with interest at 5½% compounded semi-annually, will be
amortized for 5 years. Determine: a.) his periodic payment b.) his outstanding debt at the end
of 2 years c.) his outstanding principal just after the sixth payment. Construct the
amortization schedule
d.) Required: Construct the amortization schedule
Repayment
Interest
Amount of the
Annuity Portion of Outstanding
Period Owed on Principal
Payment the Loan Balance
Principal Portion of
Annuity
the Annuity
1 ₱ 600, 000.00 ₱ 69, 443.83 ₱ 16, 500.00 ₱ 52, 943.83 ₱ 547, 056.17
2 ₱ 547, 056.17 ₱ 69, 443.83 ₱ 15, 044.04 ₱ 54, 399.79 ₱ 492, 656.38
3 ₱ 492, 656.38 ₱ 69, 443.83 ₱ 13, 548.05 ₱ 55, 895.78 ₱ 436, 760.60
4 ₱ 436, 760.60 ₱ 69, 443.83 ₱ 12, 010.92 ₱ 57, 432.92 ₱ 379, 327.68
5 ₱ 379, 327.68 ₱ 69, 443.83 ₱ 10, 431.51 ₱ 59, 012.32 ₱ 320, 315.36
6 ₱ 320, 315.36 ₱ 69, 443.83 ₱ 8, 808.67 ₱ 60, 635.16 ₱ 259, 680.20
7 ₱ 259, 680.20 ₱ 69, 443.83 ₱ 7, 141.21 ₱ 62, 302.63 ₱ 197, 377.57
8 ₱ 197, 377.57 ₱ 69, 443.83 ₱ 5, 427.88 ₱ 64, 015.95 ₱ 133, 361.63
9 ₱ 133, 361.63 ₱ 69, 443.83 ₱ 3, 667.44 ₱ 65, 776.39 ₱ 67, 585.24
10 ₱ 67, 585.24 ₱ 69, 443.83 ₱ 1, 858.59 ₱ 67, 585.24 ₱ 0.00
3. A man will deposit P4,000 in a fund at the end of each 6 months for 6 years. Find the size of
the fund at the end of 4 years if it is invested at 6% compounded semiannually. Form a table
showing the growth of the sinking fund for 6 years.
b.) Given: R = ₱ 4,000.00
j = 6% = 0.06
m=2
i = j/m = 0.06/2 = 0.03
t = 6 years
n = m(t) = 2(6) = 12
Required: A table showing the growth of the sinking fund for 6 years
Interest at
6% 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 ₱ 4, 000.00 ₱ 4, 000.00
2 ₱ 4, 000.00 ₱ 120.00 ₱ 4, 000.00 ₱ 8, 120.00
3 ₱ 8, 120.00 ₱ 243.60 ₱ 4, 000.00 ₱ 12, 363.60
4 ₱ 12, 363.60 ₱ 370.91 ₱ 4, 000.00 ₱ 16, 734.51
5 ₱ 16, 734.51 ₱ 502.04 ₱ 4, 000.00 ₱ 21, 236.54
6 ₱ 21, 236.54 ₱ 637.10 ₱ 4, 000.00 ₱ 25, 873.64
7 ₱ 25, 873.64 ₱ 776.21 ₱ 4, 000.00 ₱ 30, 649.85
8 ₱ 30, 649.85 ₱ 919.50 ₱ 4, 000.00 ₱ 35, 569.34
9 ₱ 35, 569.34 ₱ 1,067.08 ₱ 4, 000.00 ₱ 40, 636.42
10 ₱ 40, 636.42 ₱ 1, 219.09 ₱ 4, 000.00 ₱ 45, 855.52
11 ₱ 45, 855.52 ₱ 1, 375.67 ₱ 4, 000.00 ₱ 51, 231.18
12 ₱ 51, 231.18 ₱ 1, 536.94 ₱ 4, 000.00 ₱ 56, 768.12
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