Financial Mathematics Practice Questions
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Questions and Answers

Cash flow diagram is a graphical representation of cash flows drawn on a ______ scale

time

Cash flow diagram is analogous to a free body diagram for ______ problems

mechanics

Annuity is a series of equal payments occurring at equal intervals of ______

time

Annuities are established for the purpose of payment of debt by a series of equal payment at equal intervals of ______, also known as amortization

<p>time</p> Signup and view all the answers

Annuities are established to accumulate a certain amount in the future by depositing equal amounts at equal ______ intervals

<p>time</p> Signup and view all the answers

Annuities are established as a substitute periodic for a future lump sum ______

<p>payment</p> Signup and view all the answers

An annuity is a series of equal payments occurring at equal intervals of ______

<p>time</p> Signup and view all the answers

An ordinary annuity is one where the payments are made at the ______ of each period

<p>end</p> Signup and view all the answers

The future worth of all periodic payments after the last payment is made is denoted by the letter ______

<p>F</p> Signup and view all the answers

The interest rate per interest period is represented by the letter ______

<p>i</p> Signup and view all the answers

The number of compounding per year is indicated by the letter ______

<p>m</p> Signup and view all the answers

The time in years is denoted by the letter ______

<p>t</p> Signup and view all the answers

A service car whose cash price was Php540,000.00 was bought with a down payment of Php162,000.00 and monthly of Php10,874.29 for 5 years. What was the rate of interest (r) if compounded monthly? The type of annuity in this scenario is a _______ annuity.

<p>deferred</p> Signup and view all the answers

What annuity over a 10 year period at 8% is equivalent to a present worth of Php 100,000.00? The type of annuity in this scenario is a _______ annuity.

<p>perpetuity</p> Signup and view all the answers

What is the accumulated value of a payment of Php 15,000.00 at the end of each year for 5 years with interest at 5% compounded quarterly? The type of annuity in this scenario is a _______ annuity.

<p>ordinary</p> Signup and view all the answers

A parent on the day that a child is born wishes to determine what lump sum would have to be paid into an account bearing interest of 5% compounded annually in order to withdraw Php 20,000 each on the child’s 18th, 19th, 20th, and 21st birthdays. The type of annuity in this scenario is an _______ annuity.

<p>ordinary</p> Signup and view all the answers

To accumulate a fund of Php80,000.00 at the end of 10 years, a man will make equal annual deposits in the fund at the beginning of each year. How much should he deposit if the fund is invested at 5% compounded annually? The type of annuity in this scenario is an _______ annuity.

<p>ordinary</p> Signup and view all the answers

Find the present worth of perpetuity of Php 5200 payable monthly if the interest is 16% compounded monthly. The type of annuity in this scenario is a _______ annuity.

<p>perpetual</p> Signup and view all the answers

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