ES-312-Annuity (this presentation is for those who are taking business related course).pptx

this presentation is for those who are taking business related course

1. ENGINEERING ECONOMY

2. 2 Types of Annuity Annuity

3. Ordinary Annuity

4. Ordinary Annuity

5. Ordinary Annuity Answer: P1,000.03 Suppose you want to have an 8 annual withdrawal of P187.45 in your account. How much should you deposit if the interest rate is 15.1%

6. A 45 years old person wants to accumulate P500,000 by age 70. How much will she need to save each month starting one month from now if the interest rate is 0.5% per month? Answer: P1,000.03 Ordinary Annuity

7. Answer: P6,746,767.736 Ordinary Annuity

8. What are the present and the accumulated amount of a 10-year annuity paying P10,000 at the end of each year, with 15% interest compounded annually? Answer: F=P203,037.1824 P=P50,187.69 Ordinary Annuity

9. When you take your first job, you decide to start saving right away for your retirement. You put Php 500 per month into an insurance policy which averages 6% interest per year. The payment will stop after you completed the payment for 10 years and the policy will mature. You can then only get the accumulated future amount of your savings at the end of year (EOY) 40. How much is the accumulated future amount? Answer: F 10 = Php 81,939.67 F 40 = Php 493,487.83 Ordinary Annuity

10. If P25, 000 is deposited now into a savings account that earns 6% per year, what uniform annual amount could be withdrawn at the end of each year for ten years so that nothing would be left in the account after the 10th Ordinary Annuity Answer: P3396.69

11. Ordinary Annuity Recently you learned that you father is repaying a loan at 2,639.55 pesos every month for the next 10 months. He has been charged at a rate of 12% compounded monthly. Calculate the amount of loan involved. Answer: P24,999.98

12. Deffered Annuity

13. Deffered Annuity Suppose that a father, on the day his son is born, wishes to determine what lump amount would have to be paid into an account bearing interest of 12% per year to provide withdrawals of P2,000 on each of the son’s 17 th ,18 th ,19 th , 20 th , and 21 st birthdays. Answer: P1,176.03

14. Deffered Annuity Answer: P47,768.82

15. On the day his grandson was born, a man deposited to a trust company a sufficient amount of money so that the boy could receive five annual payments of P80,000 each for his college tuition fees, starting with his 18th birthday. Interest at the rate 12% per annum was to be paid on all amounts on deposit. There was also a provision that the grandson could select to withdraw no annual payments and received a single lump amount on his 25th birthday. How much is this lumpsum? Deffered Annuity Answer: P508,227.79