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    BORROWING

    Uploaded by

    Althea Dane Gregorio
    A business loan of PHP 1,000,000 is to be repaid quarterly over 2 years with an interest rate of 10% compounded quarterly. The quarterly payment is PHP 139,467.35. The total amount paid is PHP 1,115,738.77 with PHP 115,738.77 in total interest. For a loan of PHP 500,000 with annual payments of PHP 81,372.70 over 10 years at 10% interest, the outstanding balance after 6 payments is PHP 257,940.51. For semi-annual payments of PHP 100,000 over 8 years at 5% compounded semi-annually, the original loan is PHP 1,305,500.

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    BORROWING

    Uploaded by

    Althea Dane Gregorio
    54 views2 pages
    A business loan of PHP 1,000,000 is to be repaid quarterly over 2 years with an interest rate of 10% compounded quarterly. The quarterly payment is PHP 139,467.35. The total amount paid is PHP 1,115,738.77 with PHP 115,738.77 in total interest. For a loan of PHP 500,000 with annual payments of PHP 81,372.70 over 10 years at 10% interest, the outstanding balance after 6 payments is PHP 257,940.51. For semi-annual payments of PHP 100,000 over 8 years at 5% compounded semi-annually, the original loan is PHP 1,305,500.

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    A business loan of PHP 1,000,000 is to be repaid quarterly over 2 years with an interest rate of 10% compounded quarterly. The quarterly payment is PHP 139,467.35. The total amount paid is PHP 1,115,738.77 with PHP 115,738.77 in total interest. For a loan of PHP 500,000 with annual payments of PHP 81,372.70 over 10 years at 10% interest, the outstanding balance after 6 payments is PHP 257,940.51. For semi-annual payments of PHP 100,000 over 8 years at 5% compounded semi-annually, the original loan is PHP 1,305,500.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    54 views2 pages

    BORROWING

    Uploaded by

    Althea Dane Gregorio
    A business loan of PHP 1,000,000 is to be repaid quarterly over 2 years with an interest rate of 10% compounded quarterly. The quarterly payment is PHP 139,467.35. The total amount paid is PHP 1,115,738.77 with PHP 115,738.77 in total interest. For a loan of PHP 500,000 with annual payments of PHP 81,372.70 over 10 years at 10% interest, the outstanding balance after 6 payments is PHP 257,940.51. For semi-annual payments of PHP 100,000 over 8 years at 5% compounded semi-annually, the original loan is PHP 1,305,500.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

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    062223 [H]
    Created @June 22, 2023 8:24 PM

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    Borrowing

    1.) A business loan worth Php 1,000,000 is to be repaid quarterly in 2 years. The interest rate is 10% converted
    quarterly.

    P = P hp1, 000, 000


    t = 2 years
    j = 10%
    m=4
    a.) How much is the quarterly payment? (3 points)

    i = mj
    i = 0.025
    n = tm
    n=8
    1,000,000
    R = 1−(1+0.025) −8
    0.025
    R = 139, 467.35
    Quarterly Payment = Php139,467.35

    b.) How much is the total amount paid and total interest? (3 points)

    T otal amount paid = Rn


    T otal amount paid = 139, 467.35 ∗ 8
    T otal amount paid = 1, 115, 738.77
    T otal interest = T otal amount paid − P
    T otal interest = 1, 115, 738.77 − 1, 000, 000
    T otal interest = 115, 738.77
    Total Amount Paid = Php1,115,738.77
    Total Interest = Php115,738.77

    c.) Construct an amortization schedule. (8 points)

    Period Periodic Payment R Interest Payment I Principal Payment P Outstanding Balance OB

    0 ₱1,000,000.00

    1 ₱139,467.35 ₱25,000.00 ₱114,467.35 ₱885,532.65

    2 ₱139,467.35 ₱22,138.32 ₱117,329.03 ₱768,203.62

    3 ₱139,467.35 ₱19,205.09 ₱120,262.26 ₱647,941.37

    4 ₱139,467.35 ₱16,198.53 ₱123,268.81 ₱524,672.56

    062223 [H] 1
    5 ₱139,467.35 ₱13,116.81 ₱126,350.53 ₱398,322.03

    6 ₱139,467.35 ₱9,958.05 ₱129,509.30 ₱268,812.73

    7 ₱139,467.35 ₱6,720.32 ₱132,747.03 ₱136,065.70

    8 ₱139,467.35 ₱3,401.64 ₱136,065.70 ₱0.00

    d.) How much is the outstanding balance after 1 year? (1 point)

    ₱524, 672.56

    e.) How much are the principal repayment and interest component of the 5th payment? (2 points)

    P rincipal Repayment ₱126, 350.53


    Interest Component ₱13, 116.81

    2.) Mr. Remo is considering to pay his outstanding balance after 6 years of payment. The original amount of the loan is
    Php 500,000 payable annually in 10 years. If the interest rate is 10% per annum and the regular payment is Php
    81,372.70 annually, how much is the outstanding balance after the 6th payment? (4 points)

    P = P hp500, 000
    t = 10 years
    k = 6 years
    j = 10%
    m=1
    i = .10
    1
    −(n−k)
    OBk = R[ 1−(1+i)i ]
    1−(1+.10)−4
    OBk = R[ .10 ]
    R = 81, 372.70
    OB6 = P hp257, 940.51
    Outstanding balance after 6th payment is Php257,940.51

    3.)How much is the original loan if semi-annual payments of Php 100,000 are used to repay it at 5% compounded
    semi-annually for 8 years? (4 points)

    P = P hp100, 000
    j = 5%
    m=2
    t = 8 years
    i = 0.05
    2
    n = 8(2)
    −n
    P = R[ 1−(1+i)
    i ]
    1−(1+0.025)−16
    P = 100, 000[ 0.025 ]
    P = 1, 305, 500
    Original Loan is Php1,305,500

    062223 [H] 2

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