FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Use the following information for the next two questions:
Please answer the two questions. Thank you <3
You finished your studies, passed the CPA board exams, and now an accountant. A real estate company offered to sell you a house with a cash selling price of P14,000,000 under an in-house financing agreement. The amortization will be on a monthly basis over a period of 25 years and the effective interest rate is 12%. You are wondering if you can afford to purchase the house. You estimated your monthly expenditure to be P36,600, which included a risk adjustment allowance.
7. What should be the minimum balance of your monthly take home salary so that you will be able to afford to purchase the house?
a 147,451.38
b. 148,051.38
c. 151,048.38
d. 184,051.38
8. How much is the total interest expense on the financing agreement ?
a. 30,235,414
b. 23,335,216
c. 20,235,414
d. 13,265,992
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