ASSIGNMENT – TIME VALUE OF MONEY
PART I – PV OF 1
Instruction: Compute the present value of the future lump sum using the given interest rate and time period.
1. You will receive ₱150,000 in 6 years. If the discount rate is 7%, what is the present value?
2. A company expects to receive ₱500,000 from a client in 3 years. The interest rate is 10%. What is the
present value?
3. An investor will get ₱250,000 in 8 years. The market discount rate is 5%. How much is it worth today?
4. Your savings goal is ₱1,000,000 in 10 years. If the interest rate is 6%, how much should you invest
today?
5. A business will pay ₱300,000 to settle a contract in 4 years. If the discount rate is 9%, what is the present
value of the obligation?
PART II – PV OF OA OF 1
Instruction: Compute the present value of the annuity where payments are made at the end of each period.
1. You will receive ₱25,000 at the end of each year for 5 years. If the interest rate is 6%, what is the present
value?
2. A lease agreement requires you to pay ₱40,000 annually for 3 years, with payments made at year-end.
The discount rate is 8%.
3. A retirement fund will pay ₱100,000 per year for 10 years, starting at the end of this year. At 5% interest,
what is the present value?
4. You plan to give your child ₱20,000 every year for 6 years, starting next year. If the interest rate is 7%,
compute the present value.
5. A scholarship foundation gives ₱15,000 at the end of each year for 4 years. If the interest rate is 9%, how
much is the present value of this scholarship grant?
PART III – PV OF AD OF 1
Instruction: Compute the present value of the annuity where payments are made at the beginning of each period.
1. You will receive ₱30,000 at the beginning of each year for 5 years. The interest rate is 6%. What is the
present value?
2. A client pays ₱10,000 rent every year for 3 years, starting today. If the interest rate is 8%, compute the
present value.
3. You plan to contribute ₱50,000 to a savings fund at the start of every year for 7 years. If the discount rate
is 5%, what is the present value?
4. A gym offers a 4-year membership for ₱12,000 per year, with payment due at the beginning of each year.
At a 10% discount rate, what is the present value?
5. A business pays ₱100,000 annually for insurance for 6 years, with payments made at the start of each
year. At 7% interest, compute the present value.
PART IV – FV OF 1
Instruction: Compute the future value of the lump sum using the given interest rate and time period.
1. You invested ₱50,000 today in a time deposit account that earns 6% interest per year. What will be the
value after 5 years?
2. A company set aside ₱300,000 for equipment purchase. If the fund earns 7% annually, how much will it
be worth in 3 years?
3. An investor deposits ₱120,000 into a bond earning 8% interest compounded annually. What is the
future value after 4 years?
4. You deposited ₱10,000 in a trust fund that earns 10% per year. What is the future value after 6 years?
5. A student receives ₱75,000 as a scholarship and keeps it in a bank account with 5% annual interest.
How much will it become in 8 years?
PART V – FV OF OA OF 1
Instruction: Compute the future value where equal payments are made at the end of each period.
1. You save ₱20,000 at the end of each year for 5 years in an account earning 6% interest. What is the
future value?
2. A business deposits ₱50,000 annually into a savings plan at year-end for 4 years at 8% interest.
Compute the future value.
3. You contribute ₱12,000 every year for 6 years to your retirement fund, earning 5% annually. What will
be the value at the end of year 6?
4. A couple saves ₱25,000 every year for their child's education at the end of each year for 7 years. If the
interest rate is 6%, how much will they accumulate?
5. A company saves ₱100,000 annually for bonuses, deposited at year-end in a fund earning 9%. What is
the future value after 3 years?
PART VI – FV OF AD OF 1
Instruction: Compute the future value where equal payments are made at the beginning of each period.
1. You invest ₱15,000 at the beginning of each year for 5 years in a fund that earns 6% annually. What is
the future value?
2. A company prepays ₱80,000 annually for a 4-year insurance plan at the start of each year. If the
investment earns 7%, how much will it be worth at the end of 4 years?
3. You deposit ₱30,000 at the start of each year for 6 years into a savings account earning 5%. What is
the future value?
4. A parent sets aside ₱10,000 for tuition, starting now, and every year for 7 years. If the savings earn 8%
annually, what is the total future value?
5. A business puts ₱60,000 into a sinking fund every year, beginning now, for 3 years. If the return rate is
10%, what is the fund’s value at the end?
PART VII – TIME VALUE OF MONEY
Instructions: Solve the following problems using the appropriate method.
1. You invested ₱100,000 today in a fund that earns 8% annually. What will be its value after 6 years?
2. You will receive ₱25,000 at the end of each year for 5 years. The discount rate is 7%. What is the
present value of this annuity?
3. You save ₱15,000 every year for 4 years at the end of each year. If the interest rate is 6%, how much
will you have at the end of 4 years?
4. You are promised a ₱500,000 lump sum payment 10 years from now. If the market discount rate is 5%,
what is the present value?
5. You deposit ₱20,000 at the beginning of each year for 5 years into a fund earning 9% annually. How
much will the fund be worth after 5 years?
6. A company pays ₱30,000 rent annually at the beginning of each year for 3 years. If the discount rate is
6%, what is the present value?
7. A business deposits ₱300,000 into a fixed deposit account earning 10% compounded annually. How
much will it grow to in 4 years?
8. You are offered ₱1,000,000 five years from now. If the discount rate is 12%, what is the present value?
9. You invest ₱10,000 at the end of each year for 6 years in a savings plan earning 7%. What is the future
value?
10. You are to pay ₱50,000 at the start of each year for 4 years for a service. If the interest rate is 8%, how
much is the present value of the total payments?
