A loan of Php20,000 is expected to yield a compound amount of Php45,000 at a nominal rate of 9%. Assume that the loan will be compounded every 6 months. What is the time of the loan? O 8.68 years O 7.70 years O 9.21 years O 10 years

A loan of Php20,000 is expected to yield a compound amount of Php45,000 at a nominal rate of 9%. Assume that the loan will be compounded every 6 months. What is the time of the loan? O 8.68 years O 7.70 years O 9.21 years O 10 years

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 14P

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

A loan of Php20,000 is expected to yield a compound amount of Php45,000 at a
nominal rate of 9%. Assume that the loan will be compounded every 6 months.
What is the time of the loan?
O 8.68 years
O 7.70 years
O 9.21 years
O 10 years

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