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Perie-Investment

The document discusses the periodic payment of a general annuity, defining it and providing formulas for calculating present and future values of periodic payments. It includes examples demonstrating how to calculate monthly and semi-annual payments based on given loan and investment scenarios. The document concludes with an assessment problem for students to solve.

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kierlyster.catalan
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3 views

Perie-Investment

The document discusses the periodic payment of a general annuity, defining it and providing formulas for calculating present and future values of periodic payments. It includes examples demonstrating how to calculate monthly and semi-annual payments based on given loan and investment scenarios. The document concludes with an assessment problem for students to solve.

Uploaded by

kierlyster.catalan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 52

GOOD

AFTERNOON
CLASS!
1
PERIODIC
PAYMENT OF
GENERAL ANNUITY
2
OBJECTIVES
At the end of the discussion, students will be
able to;

a) define periodic payment of general annuity


b) calculate the present and future values of a
general annuity’s periodic payments using
appropriate formulas

3
GENERAL ANNUITY
A general annuity is a type of annuity
where the payment intervals and the interest
compounding periods are not equal.

4
PERIODIC PAYMENT OF
GENERAL ANNUITY
In a general annuity, the periodic
payment refers to the equal payments
made at a regular intervals.

5
FORMULAS FOR PERIODIC PAYMENT OF
GENERAL ANNUITY
1. Periodic Payment when the Present Value (PV) is known:

2. Periodic Payment when the Future Value (FV) is known:

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EXAMPLE 1: Periodic Payment when the Present Value (PV) is known
Problem:
Dianne want to take out a loan of PHP 500,000 to be repaid over 5
years with monthly payments. The nominal annual interest rate is 12%
compounded quarterly. Calculate the monthly payment.

8
EXAMPLE 1: Periodic Payment when the Present Value (PV) is known
Problem:
Dianne want to take out a loan of PHP 500,000 to be repaid over 5
years with monthly payments. The nominal annual interest rate is 12%
compounded quarterly. Calculate the monthly payment.
Solution:

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Therefore, the monthly payment would be
approximately PHP 10,936.00.
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EXAMPLE 2: Periodic Payment when the Future Value (FV) is known
Problem:
Rose want to save PHP 1,000,000 over 10 years by making semi-
annual payments. The investment account earns a nominal annual
interest rate of 8% compounded monthly. Calculate the semi-annual
payment required.

30
EXAMPLE 2: Periodic Payment when the Future Value (FV) is known
Problem:
Rose want to save PHP 1,000,000 over 10 years by making semi-
annual payments. The investment account earns a nominal annual
interest rate of 8% compounded monthly. Calculate the semi-annual
payment required.
Solution:

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Therefore, the semi-annual payment
required would be approximately
PHP 33,600.00. 50
ASSESSMENT:
Dianne Rose want to have PHP 25,000 saved
up in 3 years by making monthly payments.
The investment account earns a nominal annual
interest rate of 6% compounded quarterly.
Calculate the required monthly payment.

51
THANK
YOU
52

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